Okay maybe this pay.
Over the past week, we’ve seen an alarming number of layoffs across the startup ecosystem, from big names like Cameo, OnDeck and Robinhood to b2b platforms like Workrise and Thrasio. The common thread between most of these layoffs, the founders say, is that there has been a shift in the market and a major turnaround in business is needed. A pivot that hurts the employees who built your product after high demand.
The pullback has been in the cards for months. This first affected public technology companies and then gradually spread to late-stage deals and even their well-funded counterparts in the early stages. In February, Hoping cut 12% of staff, citing a goal of more sustainable growth while April is on Workrise is cutting staff and verticals despite a $2.9 billion valuation.
Now looks like a tipping point where the tech unicorns are realizing they may have overestimated their growth trajectory, hired too many, or overestimated their ability to lift the next round. They don’t hint at market change, they blame it. The irony here is harsh: the same workforce that helped companies weather the boom in pandemic demand, the same workforce on the chopping block when trends change.
Below we have listed which companies have announced layoffs this week to underline the unfavorable, albeit growing, trend:
Dismissal sucks. The layoff gets even more lame when your CEO, who owns Bored Ape, tweets that he has made the “painful decision to fire 87 beloved members of Cameo Fameo.” Damn, spare them at least a corporate nickname in your farewell tweet.
These layoffs affected teams across all organizations, including several senior executives. In a statement to TechCrunch, CEO Steven Galanis said that Cameo’s headcount “exploded” from 100 to 400 during the pandemic, but the company has now “sized the business to best reflect the new realities.”
Employees who spoke to TechCrunch on condition of anonymity said they would receive a severance package that includes an eight-week base salary.
Consumer investment gaming app Robinhood laid off about 300 employees at the end of April, and like Cameo, the company cited an inability to keep up with the acceleration of the early pandemic. CEO Vlad Tenev wrote on his blog that the company’s headcount grew from 700 to nearly 3,800 people from 2019 to 2021.
“After careful consideration of all these factors, we have concluded that reducing Robinhood’s workforce is the right decision to increase efficiency, increase speed and ensure that we are responsive to the changing needs of our customers,” he added.
A few days later, Robinhood announced first quarter 2022 earnings that fell much lower expectations.
Tech company On Deck, which brings together the founders, laid off about 72 people this week, about 25% of the workforce.
In an email obtained by TechCrunch, co-founders Eric Thorenberg and David Booth explained to employees that the market has “dramatically changed” since 2021, when On Deck launched its ODX accelerator program. This program gives early-stage startups $125,000 in exchange for 7% of the company, supporting over 150 companies to date, resulting in a total investment of nearly $19 million. But sources close to the company said ODX is likely to be downsized or even shut down.
TechCrunch sources also claimed that the company was trying to raise a fund of between $100 million and $150 million, but they actually got the fund closer to $40 million, leaving them with just nine months of runway. Hence layoffs, mainly in operational and investment roles.
On Deck Severance Pay includes eight weeks of paid base salary and twelve weeks of medical care.
Thrasio’s business model is to buy up and consolidate third-party Amazon sellers, but that strategy seems to be rife with ups and downs. After the rumored company went public, Thrasio raised $1 billion in funding last year, valuing the company at $10 billion.
In a memo to employees, the company hinted that it was growing too fast.
“Now that we are evaluating our strategy for the future, we need to take the time to properly embrace and develop the business we have acquired, ensure we have strong processes and controls in place, and then try to resize our team going forward. optimal areas for growth,” the note says.
However, Thrasio’s internal reshuffle doesn’t end with layoffs – the aggregator also names Greg Greeley as its new CEO. Previously, Greeley was president of Airbnb and a longtime executive at Amazon.
Last year on “journalistic Twitter,” it seemed like every day a great culture reporter was leaving sites like Buzzfeed and Vice to work at Tudum, Netflix’s burgeoning editorial project. It is clear why. One of the employees told Buzzfeed what they were doing. three times more money at Netflix than at a previous job.
Media workers are no stranger to layoffs, and perhaps working at a major tech company seemed more stable than working at a company that recently fired employees at a password-protected Zoom meeting. “spr!ngisH3r3“. But sometimes the tech industry can be just as brutal.
The project was championed by CMO Bozoma St. John, who left Netflix last month after less than two years. This departure left Tudum in a precarious position. In addition, Netflix reported that in First quarter it lost 200,000 followers in 2022, the first loss of followers in more than a decade. These losses are expected to continue as Netflix forecasts a global loss of 2 million paying subscribers in the second quarter.
The layoffs reportedly affected 25 people in Netflix’s marketing department. According to a tweet from the fired writer, employees were only offered a two-week severance pay.
the main streeta startup that helps other startups disclose tax breaks that have been valued at $500 million fired about 30% of its staff last year, according to tweet from CEO Doug Ludlow. The CEO said that “today’s incredibly tough market” will get worse and could persist for months, if not years. Like many fintech companies, MainStreet is a startup that depends on the growth of other startups, making it especially vulnerable to any kind of kickback.
Credit: techcrunch.com /