Unfortunately, there are more where from last week. Following last week’s slew of layoffs in tech, this week marks another dose of staff cuts across tech companies. Impact was felt across industries ranging from education to security, as well as a post-Series A startup to a recently-SPAC’d business.
Below, we’ve listed the latest companies that have laid off talent in response to the reset happening across startup land. Big shout out to Layoffs.fyi, a tracker that aggregates tips, spreadsheets of impacted employees and other layoff details into one spot.
Section4, an up-skilling startup launched by prominent NYU professor Scott Galloway, has laid off a quarter of staff, sources say. The layoffs, which occurred last week, affected employees across all levels of seniority and teams, but were targeted by a majority of the product team. The startup first splashed onto the scene in 2019 with a goal to scale business school-quality courses in a more affordable, and completely virtual, way.
CEO Greg Shove Confirmed layoff details to TechCrunch over e-mail and said 32 people were impacted. The executive declined to disclose specifics on what impacted employees were offered, but said the severance package was “at market or better.” Shove added that there is no hiring freeze and that the company will continue to employ people in engineering and enterprise. Part of that hiring focus, he adds, is that the startup is moving faster in serving the enterprise than individual consumers, so hiring will reflect that.
Layoffs are a dramatic way to change strategies, but also signal that the company needs to play defense before it can completely pivot. As we’ve been covering for months, consumer edtech has been flirting with selling enterprises to avoid revenue volatility (and land stickier contracts).
Carvana, the used-car retailer that went public in 2017, laid off 2,500 employees as part of the company’s “announced plans to better align staffing and expense levels with sales volumes,” it claims in a filing. Per the same filing, reports Alex Wilhelm, the company is offering those laid off four weeks’ pay plus an extra week for every year they’ve been at the company. The company claims that the executive team is forgoing their salaries for the remainder of the year to contribute severance pay.
The mobility meets e-commerce startup surged on Thursday, after hitting a two-year low. I guess that’s how the market responds to people losing jobs? A Short squeeze?
Latch, an enterprise SaaS company that makes keyless-entry systems, has been struggling for the past few months – experiencing a difficult SPAC start to part ways with its CFO, Garth Mitchell. Well, it looks like the business volatility has now trickled down to employees with its public company reportedly cutting 30 people, or 6% of its total staff, per e-mail received by TechCrunch.
In 2019, DataRobot had just raised a $ 206 million Series E round from Sapphire Ventures, Tiger Global Management and a number of other firms. Then, just weeks after COVID-19 arrived in the US, the Boston-based machine learning company conducted layoffs due to “uncertainty.” Fast-forward to the present, DataRobot laid off another 7% of its workforce this week. With about 1,000 employees, these layoffs are estimated to affect about 70 people. In an email to staff received by The Information, CEO Dan Wright said the layoffs were a response to changing market conditions after aggressive hiring last year (a trend we saw across layoffs last week).
“That level of investment is no longer sustainable for our business, especially in broader changes of context in the market, with investors now taking a look at efficiency and spending,” he said in the email.
Meta, Twitter and Uber freezes hiring
But wait, there’s more … On the heels of iffy Q1 earnings reports, some big tech companies are in trouble.
Let’s start with Meta née Facebook. Mark Zuckerberg is all-in on the metaverse, having just opened its first brick-and-mortar store. He also just demoed what’s to come on the company’s next headset, dubbed “Project Cambria,” which will incorporate mixed reality into the headset. But in Q1 alone, Meta’s Reality Labs – its VR and AR team – operated at a loss of $ 2.96 billion, and last year, Reality Labs lost over $ 10 billion. Meanwhile, Facebook’s user growth has become increasingly stagnant.
Last week, Insider reported that Facebook CFO David Wehner wrote in an internal memo that hiring will be paused throughout most of the engineering teams for the rest of the year, citing an “industry-wide downturn.” Then, this week, Reuters reported that Meta is preparing cutbacks in Reality Labs, a bad omen for its … burgeoning metaverse business. Some candidates for jobs at Meta have had their offers rescinded, per a viral LinkedIn post.
Twitter employees are also facing a moment of uncertainty as they await Elon Musk’s impending takeover. Yesterday, CEO Parag Agrawal – who is expected to be replaced after Musk’s acquisition clears – asked two key executives to leave. The company is also undergoing a hiring freeze, which is not uncommon following M&A deals.
“Effective this week, we are pausing most hiring and backfills, except for business-critical roles. We are also pulling back non-labor costs to ensure we are responsible and efficient, “a Twitter spokesperson told TechCrunch.
And then that brings us to Uber, which is significantly lower now than it was in mid-2019.
“It’s clear that the market is experiencing a seismic shift and we need to react accordingly,” CEO Dara Khosrowshahi wrote. He added, “We will treat hiring as a privilege and be deliberate about when and where we add headcount. We will be even more hardcore about costs across the board. “
It’s not easy to navigate the pandemic as a company that requires drivers and passengers to sit together in a car. But, Khosrowshahi’s note highlighted investors’ interest in products like Uber Eats, which set competitors apart from competitors like Lyft. Still, food delivery is not the most profitable business either.
Unfortunately, it’s usually the workers who get the short end of the stick in these situations, whether it’s tech staff or contracted gig workers.
Khosrowshahi ended his note with an attempt at optimism (?) In a turbulent time.
“GO GET IT!” he said.