June brought another wave of layoffs in the tech industry, with layoffs affecting about the same number of employees as in May: 16,000 employees, according to the tracker. layoffs.fyi. Another aggregator of layoffs from True Up paints a more dire picture, with 26,000 affected employees this month, up from about 20,000 last month. Either way, the data is grim.
The end of the second straight month of near-daily layoffs shows how the downturn has affected every sector of startups, from mobility to fintech. Strategy ranges; some companies are laying off certain teams, others are spreading cuts across departments, and many do not respond to comments when asked for more information. There are also founders who will make it clear immediately upon the announcement of their layoffs that they are still hiring in strategic positions.
Here are some of the companies that laid off employees this week and the stated reasons for those cuts:
When Niantic released Pokémon Go in 2016, the company firmly established itself as an AR and mobile gaming company to look out for. Animal collection game has earned $500 million in just the first two months, making it one of the fastest growing mobile games ever. The hype around the game may have subsided over the past six (!) years, but its profits have only continued to rise: Niantic made over $1 billion in in-app purchases last year.
But aside from Pokémon Go, Niantic has struggled to replicate the same level of breakthrough success with other games it has released, such as the now-defunct ones. Harry Potter: Wizards Unite or Pikmin Bloomwhich also borrows from the Nintendo IP.
So, like any other technology company, Niantic had to make a difficult decision. The company canceled four new projects, including the hyped Transformers game, and fired 8% of its employeesaffecting 85 to 90 employees. Just seven months ago, the company raised $300 million to $9 billion grade, more than double its score is from 2018.
If Niantic can’t make another game as profitable as Pokémon Go, it could still succeed as a company selling augmented reality development tools, but that would require a pivot. Starting next year, Niantic’s Lightship AR development kit will no longer be free, which could open up a new source of income for businesses.
Byju’s cuts hundreds of jobs
Edtech business Byju became famous during the pandemic as it simultaneously helped meet the demand for distance education and had the highest known valuation of any startup in India. This week, Byju’s has eliminated hundreds of jobs in recent days and deferred payments for a $1 billion acquisition it announced last year, according to TC’s Manish Singh.
The company, last valued at $22 billion, has cut hundreds of jobs on purpose with two of its latest acquisitions: Toppr, an online learning startup, and WhiteHat Jr, a coding platform targeted at kids. Byju’s tells TechCrunch that fewer than 500 people have been affected by the workforce cuts.
Singh also said that “It is estimated that around 11,000 employees in India have been laid off this year due to a market correction (at least that was the most popular excuse”).
Tesla lays off nearly 200 Autopilot employees and closes San Mateo office
Tesla fired a data annotation team working on Autopilot with its advanced driver assistance system, affecting almost 200 employees. Along with the downsizing, Tesla closed the San Mateo, California office where the Autopilot team worked.
Rebecca Bellan Records: “Until today, the Autopilot team in San Mateo and Buffalo, New York, has hundreds of Tesla employees working on data annotation. The San Mateo office had 276 employees, and after laying off 195 employees of all ranks – supervisors, labelers and data analysts – 81 employees remained on the team, who, according to sources, will be transferred to another office.
Backstage Capital lays off most staff after net new investment halts
backstage capital reduced the staff from twelve to three peoplesaid Managing Partner and Founder Arlan Hamilton during her Your First Million Podcast, which went live last Sunday. The layoff comes almost three months after Backstage Capital narrowed down its investment strategy to only participate in subsequent rounds of existing portfolios. This shrinking workforce underlines once again that the venture capital firm is struggling to grow both externally and internally.
“It’s not that I feel some kind of failure on the part of the fund, on the part of the firm, on the part of Backstage, it just could have been avoided if the systems were different, if the system in which we work was different” , Hamilton said during the podcast.
Hamilton did not respond to email requests for further comment.
Second layoff of StockX
Shoe resale platform StockX, last valued at $3.8 billion, has laid off 8% of its employees. Detroit News. The Detroit-based company has raised almost $700 million in notable capital since its founding in 2016.
This is not the first layoff that Stockx has announced: In April 2020, StockX laid off 108 people, or 12% of its global workforce. Today’s cuts are more subtle, but they show how tensions are manifesting in the company through two separate economic moments.
Substack cuts 13 employees
“Our goal is to make Substack reliable even in the most difficult economic market conditions and set the company up for long-term success without relying on raising money — or at least doing it only in our time and on our terms,” said Best. – wrote in a letter to employees, which was published on Twitter.
Substack is still hiring, but at a slower pace. His job site currently lists three engineering positions: Sales Representative, Head of Growth, and Head of Human Resources. As the company matures, it also faces a lot of competition: even Twitter is promoting long form as well as Newsletter products now.
“I’m so sorry. I told you all not too long ago that our plan was to grow the team, not lay off employees,” Best wrote.
The sum, which was estimated at $1 billion last year, lays off 18% of employees.
Amount, a fintech company that achieved unicorn status last year. laid off 18% of its workforce, according to Mary Ann Azevedo. In a written statement, CEO Adam Hughes confirmed the percentage affected and said “due to the current macro environment, we have decided to make some proactive adjustments to ensure Amount’s ability to thrive in the coming years. We believe these actions are prudent for the company’s long-term health and remain very optimistic about the future.”
To date, Amount has raised $243 million from investors including WestCap and Goldman Sachs, according to Azevedo. In January 2020, the startup spun off from Avant, an online lender, to build enterprise software for the banking industry. However, after receiving a $99 million Series D last year, this week’s cuts show business growth is not going as planned.
Credit: techcrunch.com /