you thought the market was bad for venture capitalistsbut what about the real employees behind the tech companies they’ve supported?
We are reluctantly writing a summary of technical layoffs for the third week in a row as there have been cuts again across all phases and sectors. In the past month, public and private tech companies have announced massive layoffs in several sectors. Employees at Section4, Carvana, DataRobot, Mural, Robinhood, On Deck, Thrasio, MainStreet and Netflix have been affected by the workforce reduction. Some larger companies are putting hiring freezes, such as Twitter and Meta, or announcing a shift in strategy, such as Uber.
As our mantra was when we reported on the layoffs that are plaguing the tech industry, layoffs don’t happen to companies, they happen to people. Especially for US-based tech workers, layoffs don’t just mean a loss of income – they mean a medically dangerous loss of health care.
Let’s take a look at which companies have announced discounts this week.
Following the layoffs of Netflix’s content division Tudum a few weeks ago, 150 more mostly US-based employees were laid off, as well as 70 other employees in the animation division.
A Netflix representative wrote in an emailed statement: “As we’ve explained about revenue, our slowing revenue growth means we also need to slow our cost growth as a business.” Netflix reported revenue of $7.87 billion for the first quarter of 2022 and a significant loss of 200,000 subscribers.
Contractors were also affected by these layoffs, but the number of workers affected in that designation is unclear. businesstraverse.com asked Netflix about reports that staff from various social channels, such as Strong Black Lead, Golden, Most and Con Todo, had been laid off, but Netflix said the company had decided not to cancel contracts with certain agencies it used to recruit contractors. extend. Still, it doesn’t feel great to see queers and people of color lose their jobs, allowing Netflix to target these audiences.
Picsart’s unicorn status didn’t make it
Less than a year ago, Picsart raised $130 million from SoftBank, pushing the visual creator tools startup into unicorn territory with a valuation of over $1 billion. A leaner, hipper version of Adobe, looks like Picsart has had a setback, what fired 8% of its staff this week, involving 90 people. Other SoftBank-backed companies like Cameo, which also turned into a unicorn last year, have just taken layoffs. When Alex Wilhelm last reported on Picsart, he noted that the company was expected to go public – it still hasn’t happened, which could be a clue to what’s going on at the company to make such cuts. to speed up.
Cars24, a used-car marketplace last valued at $3.3 billion by its venture capital investors, cut 600 jobs — or 6% of its entire workforce — this week. The Series G startup had just raised a $400 million round, meaning the cut had more to do with the runway lengthening than a lack of ability to pay the bills.
As our own Manish Singh reports, Cars24 is one of many Indian startups that have laid people off in recent weeks. Employees from Vedantu, Unacademy, Meesho, OkCredit, Trell, Furlenco and Lido have also cut several roles, he says.
Marketplace startups, such as Cars24, feel particularly vulnerable during a recession. Consumer spending can become extremely volatile, meaning that demand can decline while supply remains constant or even grows. Balancing the two sides is the greatest art of starting a marketplace, but it becomes especially difficult to predict stability in earnings when everyone else has gone on hiatus.
Skillz scales back esports biz team
Esports company Skillz laid off 70 employees earlier this week, about 10% of its team, the company confirmed to businesstraverse.com. No executives have been affected by the cuts.
“We have decided to reorganize our resources and investments to increase our profitable growth and further fulfill our vision to build the competitive tier of the Internet,” the company said in an emailed statement. “This reshuffle resulted in some of our programs changing and, consequently, people on our team as we prioritize our resources to continue to deliver a great player experience and empower more game developers to bring their creations to life. to bring life.”
The company’s statement is ironic; to better support its external community, it cuts its internal community. The company says it plans to continue in some areas of the business, but doesn’t specify which ones.