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In May and June, over 16,000 tech workers lost their jobs, according to Layoffs.fyi. We started working on a weekly column about tech layoffs because we accidentally started working on a weekly column about tech layoffs because we accidentally started working on a weekly column about tech layoffs because we accidentally started working on a weekly column about tech layoffs because we accidentally started working on a weekly column about technology layoffs
It can feel like the same story: number of those impacted, roles or teams that were reduced, severance package details and a vaguely generic statement from the CEO citing market turbulence as a key reason for the reduction. I am always curious about the follow-up stories. I wanted to know what else to ask and include in the stories.
A follow-up piece with data on where people who are laid off go next would be great. Is there a specific company or industry that scoops them up? Is it possible that some companies are started? Is that something else completely?
This question made my mind immediately jump to the talent opportunity that emerged in early 2020 when unicorns laid off chunks of staff in preparation for the pandemic. Then, I wrote a story about how startups were hiring pods of employees that got laid off, otherwise known as a not-so-new strategy of acquiring. At one point, a majority of online mortgage company Stavvy was full of ex-Toasters impacted by the restaurant tech’s 50% workforce reduction.
Beyond the rise of acqui-hiring, I think we’ll see some classic fellowships pop up that help recently laid-off people break into entrepreneurship. Neundorfer’s firm, January Ventures, started a program similar to that of Cleo Capital, which gives capital to aspiring founders to kickstart them.
The key here is that layoffs make people more risk averse, especially depending on their socioeconomic background. That mixed with the fact that Big Tech is on a hiring freeze, I don’t know what happens when a wave of people lose their jobs in a mixed messages hiring market.
But, if anyone has the data to answer this question, do send it on over!
How do layoffs affect mental health, anxiety and productivity of the rest of the team?
I’ve now spoken to dozens and dozens of former and current employees within struggling startups, and the reaction to layoffs largely feels like whiplash for those impacted.
The reason? The difference between layoffs in 2022 and 2020 is that many of the companies that are laying people off today are well capitalized, named unicorns just one year ago. In 2020, cuts could easily be cited to an unprecedented pandemic that complicated growth plans; while in 2022, cuts come right after leaders boasted insane growth just months prior. Add in the fact that people are still laid off in questionable ways — from severance showing up in payroll to long-winded memos — and I can’t imagine these cuts don’t aggressively impact morale internally and externally.
International workers face additional complexities when laid off, as loss of employment can put visa status in flux. Even as companies put together spreadsheets or resume support, the added volatility could mean talented workers are forced to leave the United States altogether to pursue a better life somewhere else. These are stories we’re working to tell but are sensitive for obvious reasons.
Which fraction of the company's employees have been hired in the last two years? I don't know how many companies did layoffs during the frothiness of 2021.
The reason this question is important is that it colors how a layoff was engineered; and if it only impacts the newest members, the most nascent products or everyone across the board — from executives to entry-level hires. If it’s the latter, it may suggest that a startup is having deep inset problems that requires a mass reorganization of its resources. If a workforce reduction largely impacts those hired in the past year, it could mean that the startup needs to scale back some of its more experimental work and hone back to where it already has product-market fit. Thanks for the tip, I’ll start asking about this!
We will discuss the grocery delivery world in the rest of the newsletter. You can support me by forwarding this newsletter to a friend or following me on social networking sites. As a programming note, I am out on vacation next week so expect an abbreviated Startups Weekly column, still from yours, but with support from Henry Pickavet, Richard Dal Porto and the rest of the team
Ivella is a Santa Monica based startup that wants to build banking products for couples. A split account product that just raised $3.5 million in funding is being launched by the CEO and co- founder of the company. DoNotPay CEO Joshua Browder is one of the investors.
Joint accounts are the best solution so far, because they allow two people to join their accounts and pull from the same pool. Lalji wants to build a split account in which couples maintain individual accounts and balances but have an Ivella card linked to both of their accounts.
Couples can set ratios with the shared card, and Ivella will split transactions if they use the Ivella card. Lalji says that this was the largest technical challenge that Ivella was confronted with.
“The place that a lot of people fall short, just like a lot of fintech falls short, is that they don’t break the mold of what banking looks and feels like,” Lalji said. “And because we’re focused specifically on couples, we want to build a product that feels not so sterile and not just like a bank.”
Kyle wrote about how the on-demand delivery market is winding down. He notes that there are signs of a correction, including a slashed valuation, DoorDash and Deliveroo stock price fluctuations, and layoffs.
The on-demand delivery market's lack of profitability is often talked about in a broad-stroke way. This piece sheds light on the reasons why grocery delivery is so expensive.
According to the ex-CEO of StubHub, Craft has invested in a number of delivery companies.
“The fast delivery space is the epitome of exuberance of 2021: Investors were pouring money into cash-guzzling companies with flimsy business models,” he told TechCrunch in an email interview. “Fast delivery companies are capital intensive. They require local infrastructure, local people and local operations that are expensive to build out. As a result, all of these companies have been incinerating boatloads of cash over the past 12 to 24 months as they’ve expanded to new geographic markets. Of course consumers like the instant gratification of a pint of ice cream in 15 minutes, so revenues grew quickly, driven by a great consumer experience and word-of-mouth virality. Investors followed the growth paying no attention to the potential for profitability. But the notion that a startup can deliver on that promise profitably is a pipe dream.”
It was seen on a website.
It was seen on a website.
Next time will be sooner or later.