Over the past week, I’ve noticed an alarming amount of layoffs in the startup ecosystem, from big names like Cameo, On Deck, and Robinhood to B2B platforms like Workrise and Thrasio. The common thread among most of those layoffs, according to the founders, is that there has been a change in the market and that a serious turn in the industry is needed. A turnaround, that is, one that harms the workers who built their product after peak demand.
A setback has been in the cards for months. This first had an effect on state-owned generation enterprises, and then slowly trickled down to late-stage deals and even to their well-funded counterparts at an early stage. In February, Hopin cut 12% of its workforce, bringing up a more sustainable expansion target, while in April, Workrise reduced its workforce and vertical markets despite a valuation of $2. 9 billion.
This now seems like a turning point, at which tech unicorns realize that they would possibly have over-promised a trajectory of expansion, over-contracted or overvalued their ability to build the next round. They are not referring to the evolution of the market, they are blaming it. The irony here is stark: The same thing that helped corporations respond to a pandemic boom call is the same number of employees on the record when trends change.
Listed below are the corporations that announced layoffs this week to highlight the unfortunate, albeit growing, trend.
Software-as-a-service startups have a reputation for being predictable and therefore best for the risk-averse investor. While solid business models have protected SaaS corporations from business recession for some time, TechCrunch finds that the Mural starter platform has just gotten rid of dozens of employees. According to sources and LinkedIn messages from the laid-off employees, the layoffs came after a restructuring of the SaaS company. Vendors and those guilty of visitors’ good fortune have been affected. Notably, the cut comes less than a year after Mural raised a $50 million Series C after tripling its ARR.
Being fired sucks. Being fired sucks even worse when Bored Ape’s owner CEO tweets that he has made the “painful resolution to let 87 beloved Cameo Fameo members pass. “Damn, at least save them the corporate nickname in your farewell tweet.
These layoffs affected groups from all organizations, adding several Suite C members. At TechCrunch, CEO Steven Galanis said Cameo’s workforce “exploded” from 100 to 400 during the pandemic shutdowns, but now the company “has resized the company as they reflect new realities. “
Employees who spoke to TechCrunch on condition of anonymity would get severance packages that included 8 weeks of base salary.
Consumer investment game app Robinhood laid off about 300 workers in late April and, like Cameo, the company cited the inability to keep up with the initial acceleration of the pandemic. CEO Vlad Tenev wrote in a blog post that the company’s workforce grew from 700 to nearly 3,800 from 2019 to 2021.
“After carefully contemplating all of those factors, we decided that those discounts on Robinhood staff were the right resolution for efficiency, increasing our speed and making sure we met our customers’ conversion wishes,” he added.
A few days later, Robinhood announced its first quarter 2022 results, well below expectations.
Robinhood will allow users to lend their shares to diversify income
On Deck, a tech company that connects founders, laid off another 72 people this week, representing about 25 percent of the workforce.
In an email received via TechCrunch, co-founders Erik Torenberg and David Booth said the market has “radically changed” since 2021, when On Deck introduced its ODX accelerator program. business, supporting more than 150 corporations to date, bringing the total investment to approximately $19 million. But resources close to the company said ODX will most likely be scaled back or even shut down.
TechCrunch’s resources also alleged that the company was looking to raise a fund of between $100 million and $150 million, but they actually got a fund closer to $40 million, leaving them with only nine months to go. As a result, layoffs, basically in operations and investment roles.
On Deck’s compensation packages include 8 weeks of paid base salary and 12 weeks of physical care.
Thrasio’s business style is to buy and consolidate external Amazon sellers, but this strategy is fraught with ups and downs. After being publicly announced, Thrasio raised $1 billion in investment last year, valuing the company at $10 billion.
In a note to employees, the company hinted that it is getting too big, too fast.
“Now, as we compare our strategy for the way forward, we want to take the time to absorb and grow the acquired businesses, make sure we have rigorous processes and controls, and then look to resize our team in the optimal spaces for growth,” the note reads.
Thrasio’s internal turmoil doesn’t end in layoffs: the aggregator also installs Greg Greeley as the new CEO. Greeley was once president of Airbnb and an Amazon executive for a long time.
How many unicorns are piñatas full of expired sweets?
Last year, on “Twitter journalism,” it seemed like every day, a great cultural journalist left sites like BuzzFeed and Vice to work on Tudum, a burgeoning editorial assignment at Netflix. It makes sense why. A staff member told BuzzFeed that they made 3 times more cash on Netflix than at their previous job.
Media staff are no strangers to layoffs, and perhaps a task at a big tech company seemed more solid than running in a place that recently laid off staff in a Zoom meeting with the password “spr!ngisH3r3. “But the tech industry can be just as cruel.
The task was defended through marketing director Bozoma Saint John, who left Netflix last month after less than two years. This departure left Tudum on shaky foundations. In addition, Netflix reported that in the first quarter of 2022 it lost 200,000 subscribers, its first subscriber. loss in more than a decade. These losses are expected to continue, as Netflix forecasts a global loss of paying subscribers of 2 million for the current quarter.
The layoffs reportedly affected a total of 25 other people in Netflix’s marketing department. According to a tweet from a fired writer, they only received two weeks of severance pay.
Piece of cake? No, that’s the number of Netflix subscribers ruined
MainStreet, a startup that is helping other startups get tax credits worth $500 million last year, laid off about 30 percent of its staff, according to a tweet from CEO Doug Ludlow. worse and can last for months or even years. Like many fintechs, MainStreet is a startup that relies on the expansion of other startups, making it vulnerable to any kind of withdrawal.
Fintech Roundup: How going fast and furious can ruin your startup
If you’ve been affected by a startup’s firing, tap Natasha Mascarenhas’ or Amanda Silberling’s email or Twitter’s direct message: @nmasc_ or @asilbwrites.