June brought another wave of tech layoffs, with cuts affecting roughly the same number of workers as May: 16,000 workers, according to tracker fired.fyi. Another aggregator for layoffs from TrueUp paints a bleaker picture, with 26,000 workers affected this month, up from about 20,000 last month. Either way, the data is grim.
The end of a second straight month of near-daily layoffs shows how every startup sector, from mobility to fintech, is being impacted by the downturn. strategy achievements; some companies are firing specific teams, others are distributing cuts across all departments, and many companies do not respond to comments when asked for more information. There are also the founders who – in the same breath as their resignation announcement – will make it clear that they are still recruiting people for strategic positions.
Here are some of the companies that laid off staff this week, and the reasons cited behind those cuts:
When Niantic released Pokémon Go in 2016, the company firmly established itself as an AR and mobile gaming company to watch out for. The animal collecting game made $500 million in its first two months, making it one of the fastest growing mobile games ever. Over the past six (!) years, the hype surrounding the game may have abated, but profits have only continued to grow, with Niantic making over $1 billion last year from the title’s in-app purchases.
But outside of Pokémon Go, Niantic has struggled to replicate the same level of breakthrough success with the other games it’s released, such as the now-defunct Harry Potter: Wizards Unite of Pikmin Bloom, which also borrows from Nintendo IP.
So, like every other tech company right now, Niantic had a tough decision to make. The company canceled four new projects, including a hyped Transformers game, and let go of 8% of its workforce, affecting 85 to 90 employees. Just seven months ago, the company raised $300 million at a valuation of $9 billion, more than doubling its valuation from 2018.
If Niantic can’t make another game as profitable as Pokémon Go, it could still see success as a company selling AR development tools — but that would require a linchpin. Starting next year, Niantic’s Lightship AR development kit will no longer be free, which could open up a new revenue stream for the company.
Byju’s cuts hundreds of jobs
Edtech firm Byju rose to prominence during the pandemic as it both helped meet the demand for distance education and boasted the highest known rating of any startup in India. This week, Byju has eliminated hundreds of jobs in recent days and cut payments for a $1 billion acquisition it announced last year, TC’s Manish Singh reports.
The company, last valued at $22 billion, cut hundreds of jobs on two of its latest acquisitions: Toppr, an online learning startup, and WhiteHat Jr, a kid-centric coding platform. Byju’s tells australiabusinessblog.com that fewer than 500 people have been affected by the staff reduction.
Singh also said that “by estimates” jobs of about 11,000 workers in India have been eliminated this year as a result of the market correction (or that was the most popular excuse).
Tesla lays off nearly 200 Autopilot employees, closes San Mateo . office
Tesla has fired the data annotation team that worked on Autopilot, its advanced driver assistance system, affecting nearly 200 employees. In addition to the staff cut, Tesla closed the San Mateo, California office where the Autopilot team worked.
Rebecca Bellan reports:
Until today, Tesla had hundreds of data annotation employees working on the Autopilot team in San Mateo and Buffalo, New York. The San Mateo office had a staff of 276, and after the layoff of 195 staffers from all ranks – supervisors, labelers and data analysts – the team is left with 81 employees, who will be moved to another office, sources say.
Backstage Capital cuts majority of staff after pause in net new investments
Backstage Capital has reduced its workforce from 12 to three, managing partner and founder Arlan Hamilton said during her “Your First Million” podcast published last Sunday. The resignation comes nearly three months after Backstage Capital narrowed its investment strategy to only participate in follow-up rounds of existing portfolios. This staff reduction underlines once again that the venture capital firm is struggling to grow, both externally and internally.
“It’s not like I feel like there’s any kind of failure on the fund side, on the company side, on the Backstage side; it’s that this could have been prevented if the systems were different — if the system we work in had been different,” Hamilton said during the podcast.
Hamilton did not respond to requests via email for further comment.
Second resignation from StockX
Shoe resale platform StockX, last valued at $3.8 billion, has laid off 8% of its employees, the company confirmed to australiabusinessblog.com. The Detroit-based company says it has raised more than $550 million in known capital since its founding in 2016. StockX sends the following statement regarding the staff reduction:
As a growing global brand, it’s important to adapt and pivot to deliver the highest level of service to the millions of customers we serve around the world. The macroeconomic challenges currently affecting our global economy continue to affect consumer behavior and affect businesses of all shapes and sizes. StockX is not immune to these challenges, and as our business continues to grow, the current environment is prompting us to make adjustments. As a result, we made the difficult but wise decision to reduce our workforce. Saying goodbye to team members is never easy, especially when those team members are people who are passionate about their work and committed to delivering on our brand promise every day. However, in order to navigate effectively in today’s reality, investments must be made in long-term sustainability. We are grateful for the contributions of those affected and are working to ensure they are supported during this time of transition.
This isn’t the first layoff StockX has announced: In April 2020, StockX laid off 108 people or 12% of its global workforce. Today’s austerity measures are leaner, but show how tensions manifest themselves for the company at two separate economic moments.
Sub-stack cuts 13 employees
After going back another attempt to dare to raise capitalSubstack cuts costs by letting go of 13 employees who worked primarily in HR and writer support roles.
“Our goal is to make Substack robust, even in the toughest economic market conditions, and to prime the business for long-term success without relying on raising money – or at least doing so only on our time and our terms,” Best wrote in a letter to employees, which he made public on Twitter.
Substack is still hiring, but at a slower pace. Currently, the job board lists three technical positions, a salesperson, a head of growth and a head of HR. As the company matures, there is also strong competition: Even Twitter is now pushing products for long forms and newsletters. “I’m very sorry. Not long ago I told you all that our plan was to grow the team and not take layoffs,” Best wrote.
Amount, valued at $1 billion last year, lays off 18% of staff
Amount, a fintech that reached unicorn status last year, has laid off 18% of its workforce, Mary Ann Azevedo reports. In a written statement, CEO Adam Hughes confirmed the percentage impact, saying that “Due to the current macroeconomic environment, we have decided to make some proactive adjustments to ensure Amount can thrive in the coming years. We believe these actions are sensible for the long-term health of the business and remain very excited about the future.”
As Azevedo reports, Amount has raised $243 million to date from investors including WestCap and Goldman Sachs. The startup emerged from Avant, an online lender, in January 2020 to build business software for the banking industry. However, after bringing in a $99 million Series D last year, this week’s budget cuts show the company’s growth isn’t progressing as planned.