Bolt Loaned Employees Thousands to Buy Stock—Then Laid Them Off

The CEO of Bolt sent a message to his employees on the company's chat room. One group would join a meeting with human resources, meaning they were being laid off, while another group would go to a town hall.

A third of the company was let go by the end of the day. The mood wasn't good. Some employees felt confused. The startup had just raised $355 million in venture capital and was valued at $11 billion. Bolt spent over one billion dollars to acquire a startup. The founder bragged that the company was growing at lightning speed, despite signs of a worsening market. An employee asked if they should expect layoffs soon. The CEO had denied.

Some Bolt's employees took out personal loans from the company in order to exercise their stock options after being reassured. Bolt founder Ryan Breslow described the program as the most employee-friendly stock option program possible. Bolt would allow employees to take out interest-free loans from the company if they exercised their options early. Over half of Bolt's employees chose to participate in the program, according to Breslow.

The employee who asked not to be named because he isn't authorized to discuss internal company matters took out a $100,000 loan to exercise his stock options. He thought Bolt looked like a rocketship and he was willing to take the risk for the potential reward. The restructuring meeting appeared on his calendar just months after he took the loan. He was going to lose his job.

Thousands of employees were left in the lurch when a number of startups had to make cuts to their staff. Hundreds of jobs were cut this spring because of the growth of their staff during the Pandemic. Many startup CEOs are realizing that they might not be able to get easy money anymore as venture capitalists are turning off the fire hose. Bolt needed to extend its runway in order to become profitable with the money it had already raised. Some people had to be sacrificed to make that happen.

It felt like whiplash for Bolt's workers. Hundreds of new people were added to the startup at the end of the year. Many of the new hires left their jobs at the big tech companies after a year and a half. The Bolt software engineer said he came to the startup because of the risk. It doesn't work out when you take a risk. That doesn't feel like this.