Venture-backed startups are laying off thousands of tech workers as the coronavirus strains finances. Here's a list of all of the startups that are cutting headcount.
Venture-backed startups have begun laying off employees, as the coronavirus and the subsequent economic shutdown has wreaked havoc on companies large and small. Business Insider is keeping a list of running list of startups that are slashing headcount. Visit Business Insider's homepage for more stories.
Lyft is laying off nearly 1,000 employees — 17% of its workforce — as the coronavirus sends the ride-hailing industry into a nosedive Envoy, the Andreessen Horowitz-backed startup that sold software to Airbnb, Asana and Slack, just cut 30% of its workforce as a work-from-home era disrupted its pitch to revolutionize the workplace Leaked memo: Troubled SoftBank-backed robotics startup Zume just conducted a 2nd round of sweeping layoffs after funding fell through Austin unicorn startup RigUp went from hiring 'at a rapid pace' to cutting 25% of staff in a matter of weeks. Now a data breach is adding to its woes. $967 million startup DataStax laid off 15+ employees last week — its third round of job cuts since its new CEO joined in October $1.5 billion ZipRecruiter just laid off hundreds only days after the CEO said the economy was headed for a steep increase in hiring after the end of the coronavirus The CEO of Voi, scooter rival to $2.5 billion Bird, goes public on why it furloughed and laid off staff to cope with COVID-19 Electric scooter startup Bird has laid off 30% of the company in a scramble to preserve a 'cash runway' to last until the end of 2021
TripActions, the $4 billion Andreessen Horowitz-backed corporate travel startup, just laid off 296 employees as the travel industry grinds to a halt Andreessen Horowitz-backed Wonderschool just laid off 75% of staff on a Zoom call, telling employees the coronavirus could dry up any more funding for 2 years O'Reilly Media, known for its influential open source conferences and books about coding, has laid off 75 people and shuttered its events business Pay-by-the-minute fitness app Popin has shut down, according to an email sent out to its users Consumer Buzzy luggage startup Away has furloughed half of its staff and laid off 60 employees as the coronavirus continues to crush the travel industry ThirdLove, the buzzy lingerie upstart that challenged Victoria's Secret's dominance, just laid off nearly 30% of its workforce as the coronavirus crushes DTC companies Iris Nova, the buzzy direct-to-consumer startup backed by Coca-Cola, has laid off half its staff as the coronavirus pandemic hits its retail business Startups like ClassPass and The Wing have cut significant portions of their workforce Media A leaked memo reveals that the Kevin Durant-backed sports media startup Overtime just laid off 20% of its staff, and won't give affected employees healthcare or severance unless they sign a confidentiality agreement Real Estate and Travel Airbnb is cutting 25% of staff — 1,900 jobs — after its business has been slammed by the coronavirus crisis SoftBank-backed iBuyer Opendoor just slashed 35% of staff after the coronavirus forced the startup to halt its home-flipping operations Flex-space unicorn Knotel just laid off 30% of workers and furloughed another 20% as the coronavirus cripples a once buzzy industry SoftBank-backed real estate brokerage Compass just slashed 15% of staff and is pausing marketing as coronavirus slams the housing market Days after laying off 20% of its workforce, Brookfield-backed Convene furloughs more than half of remaining employees due to coronavirus closures Airbnb-backed Zeus Living just laid off 30% percent of staff as the coronavirus upends travel and hospitality startupsJoin the conversation about this story »
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Stack Overflow, the site where millions of programmers get their questions answered, is reducing its workforce by 15% because of coronavirus
The popular developer Q&A site Stack Overflow is reducing its workforce by 15%, according to a...The popular developer Q&A site Stack Overflow is reducing its workforce by 15%, according to a company spokesperson, affecting 40 employees. Most of the affected employees were furloughed, meaning they keep their health insurance and other benefits. Some were laid off, the spokesperson said. Stack Overflow's Talent business, which helps companies recruit and hire developers, has taken a hit during the coronavirus pandemic. "We took these actions with great care and only after assessing all other options," a Stack Overflow spokesperson told Business Insider. "We did this in order to ensure that we can serve our customers and community in the long-run." Visit Business Insider's homepage for more stories. Stack Overflow, a popular forum where millions of software developers get their questions answered, has reduced its workforce by 40 employees, or 15% of its total headcount, because of the impact of the coronavirus pandemic on its business, a spokesperson tells Business Insider. Most of the affected employees were furloughed, meaning they can keep their health insurance and other benefits. Some, however, were laid off. The reductions were announced to the company on Tuesday, the spokesperson said. The Stack Overflow spokesperson says its Talent business, which helps companies recruit and hire developers, has taken a hit amid the ongoing crisis, as hiring slows down across the tech industry. The spokesperson says that the company's short-term priority is growing its paid product and advertising businesses so that the furloughed employees can come back to work sooner rather than later. "We took these actions with great care and only after assessing all other options," a Stack Overflow spokesperson told Business Insider. "We did this in order to ensure that we can serve our customers and community in the long-run." Stack Overflow has said that it sees over 50 million monthly unique visitors and over 255 million monthly visits. As Business Insider reported in October, the company boasts an annualized revenue run rate of $80 million. Previously, Stack Overflow CEO Prashanth Chandrasekar told Business Insider that in addition to its popular developer Q&A forum, the company is focusing on growing its paid, premium products like Talent, Ads, and Teams, which allows companies to build their own versions of Stack Overflow for internal use to share knowledge. Stack Overflow has raised a total of $70 million from investors like Andreessen Horowitz, Spark Capital, and Amazon CEO Jeff Bezos' investment fund Bezos Expeditions, according to PitchBook. Read Stack Overflow's full statement below: "Given the impact of COVID-19 on Stack Overflow's Talent business, one of our three business lines, we made the difficult decision to reduce our global workforce by approximately 15%. Most of the affected employees were furloughed, except for employees and contractors in regions where furloughs were unfortunately not an option.We took these actions with great care and only after assessing all other options. We did this in order to ensure that we can serve our customers and community in the long-run. With our core SaaS business, Teams, and our Advertising business growing, our priority moving forward is accelerating that growth so that we can have our colleagues rejoin our team as soon as viable." Got a tip? Contact this reporter via email at email@example.com, Signal at 646.376.6106, Telegram at @rosaliechan, or Twitter DM at @rosaliechan17. (PR pitches by email only, please.) Other types of secure messaging available upon request. SEE ALSO: Dell says that it's 'broadly' stopped hiring, even as its subsidiary VMware focuses its recruitment on five key priorities Join the conversation about this story » NOW WATCH: Why Pikes Peak is the most dangerous racetrack in America
WeWork is rolling out global layoffs over Zoom as the coworking giant struggles to cope with coronavirus fallout
WeWork has started global layoffs as the coronavirus pandemic ravages the office industry, with sales, physical...WeWork has started global layoffs as the coronavirus pandemic ravages the office industry, with sales, physical product, operations, and other groups seeing cuts on Thursday. Other venture-backed competitors, including Knotel, Industrious, and Convene, have laid off hundreds as the pandemic drives down demand for office space. Earlier this month, WeWork's outsourced cleaning provider, JLL, laid off some cleaning staff in response to the pandemic. For more WeWork stories, click here. WeWork laid staff off on Thursday in cuts that could continue for the next month. Affected departments ranged from business operations to sales to physical product, which includes design. The layoffs came via Zoom calls, as has become the norm across downsizing companies under shelter-in-place orders. People who were laid off, who spoke under the condition of anonymity because of nondisclosure agreements, described departmental executives delivering the cuts via a script to their respective groups – chief sales officer Nick Worswick talked to the sales team, and chief product officer Hamid Hashemi spoke to physical product, for example. The executives then handed the call to human resources. The latest cuts come on top of thousands of jobs the coworking company has slashed after its IPO imploded last year. The laid-off employees received the same severance as those affected by the November cuts: four months of salary and benefits. The total number of cuts was not communicated to employees, said multiple sources. In November, employees were laid off en masse, with New York employees reporting to WeWork's Chelsea headquarters with their company-issued electronics to turn in over the course of a day. Now, the layoffs appear to be rolled out over days and weeks. At an all-staff meeting earlier this month, CEO Sandeep Mathrani said the cuts would finish by the end of May, Bloomberg reported. "As WeWork continues to execute its strategic five-year plan we are realigning certain functions and teams to reflect our business priorities," a WeWork spokesman said, declining further comment. The company also cut 74 positions in San Francisco, ranging from building management to corporate roles, the San Francisco Business Times reported earlier this week. Many of WeWork's venture-backed competitors have already cut staff as the coronavirus pandemic ravages the real-estate market, dampening demand for office space that sits empty during shelter-in-place orders. So far, 435 total employees have been impacted among Convene, Industrious, and Knotel. See more: The coronavirus is a 'nuclear bomb' for companies like WeWork. 10 real-estate insiders lay out the future of flex-office, and how employers are preparing now. WeWork execs had previously publicly projected confidence about weathering the coronavirus pandemic, with a March letter to investors reassuring them that the $4.4 billion in cash and cash commitments on hand at the start of 2020 was enough to execute the company's five-year plan. SoftBank, WeWork's biggest investor, earlier this month scrapped a planned purchase of $3 billion worth of WeWork shares from other investors and employees, including former CEO Adam Neumann. The decision also most likely means WeWork would no longer be able to tap into a $1.1 billion credit line from the Japanese conglomerate, since that debt financing was conditioned on SoftBank completing its share-purchase plan. And earlier on Thursday, SoftBank bumped up its estimate for how big a hit its $100 billion Vision Fund would take from its WeWork investment and subsequent bailout. Business Insider had reported earlier this month that WeWork's maintenance outsourcing provider cut some of its cleaning staff even as buildings stay open during the pandemic. It was unclear exactly how many of those contract employees were cut, though all staff with the title "community service associate" were laid off. A source with knowledge of the business told Business Insider that it was not a majority of the 1,000 WeWorkers who were outsourced to JLL in December. According to its website, WeWork has not shut any of its US locations due to the coronavirus, explaining that because some of its members are essential and WeWork provides mail and other services, they can remain open. Still, members have told Business Insider they were still expected to pay WeWork April rent, even if they are nonessential businesses that cannot actually enter the space. SoftBank-backed companies have cut more than 3,300 employees in 2020, with many of those layoffs coming before the pandemic. Have a WeWork tip? Contact this reporter via encrypted messaging app Signal at +1 (646) 768-1627 using a non-work phone, email at firstname.lastname@example.org, or Twitter DM at @MeghanEMorris. (PR pitches by email only, please.) You can also contact Business Insider securely via SecureDrop. SEE ALSO: Knotel is scrambling to pay millions in bills that started stacking up before the coronavirus hit, and hasn't paid April rent at some locations READ MORE: $1.5 billion ZipRecruiter just laid off hundreds only days after the CEO said the economy was headed for a steep increase in hiring after the end of the coronavirus SEE ALSO: WeWork members are getting fed up paying rent while the coworking giant tries to catch a break on its own leases. Here's how 4 entrepreneurs are trying to get out. Join the conversation about this story » NOW WATCH: Why Pikes Peak is the most dangerous racetrack in America
$1 billion startup Rent the Runway has furloughed 35% of its employees. Its future is now in question as coronavirus ravages retail.
Rent the Runway has furloughed roughly 35% of its corporate employees and cut overall headcount as...Rent the Runway has furloughed roughly 35% of its corporate employees and cut overall headcount as a result of the fallout from the coronavirus, the company confirmed to Business Insider. A slew of startups, from scooter company Bird to luggage-maker Away, have been grappling with the effects of the pandemic. As a flag-bearer for the new breed of direct-to-consumer brands, Rent the Runway's ability to withstand the crisis could serve as an important test case for startups facing the biggest business threat in a generation. Click here for more BI Prime stories. It was mid March and businesses were just starting to feel the impact of coronavirus — even highflying startups weren't immune. During a virtual company-wide meeting, Rent the Runway co-founder and CEO Jenn Hyman told staff that the clothing rental company would freeze hiring for the rest of 2020, cut its marketing budget, and that the leadership team would all take pay cuts. Some staffers were also told to negotiate better terms with vendors, like extended payment terms, by their managers. "We were all beginning to get worried, and knew that layoffs were a possibility," said a former employee who attended the meeting and was ultimately laid off. "But you always just hope it's not going to be you." Just a few days later on March 27, employees received an emotional video message from Hyman in their inboxes and were instructed to join Zoom calls where various department leads told members of their teams that they would either be laid off, furloughed, or receive a pay cut, according to three former employees with direct knowledge of the event. Former employees told Business Insider that their email accounts were disabled within 30 minutes of the calls. Rent the Runway has furloughed corporate employees — roughly 35%, according to the company. It also laid off "less than 10%" of its overall headcount, but wouldn't be more specific. The cuts are a result of the fallout of the coronavirus, the company confirmed to Business Insider. "We built Rent the Runway so our customers could 'show up' feeling powerful and confident every single day, whether they're at work or in a Zoom meeting," Hyman told Business Insider. "No amount of scenario planning could have prepared any business for the fallout of coronavirus, but our path forward remains unchanged, and even in a new normal, our mission is more relevant than ever. We will continue to be here for our customers so they can access the closet in the cloud with total flexibility." These cuts coincided with the startup laying off its entire retail staff late last month, on the heels of its retail stores in Chicago, New York, Los Angeles, and Washington, DC, being forced to shut in the wake of the pandemic. A slew of startups, from lingerie startup ThirdLove to luggage unicorn Away, have been grappling with the effects of the pandemic with states mandating the closure of non-essential stores and customers curtailing their spending. But as a flag-bearer for the new breed of direct-to-consumer brands, Rent the Runway's ability to withstand the crisis and avoid a repeat of past missteps could serve as an important test case for startups facing the biggest business threat in a generation. Particularly for those in the sharing economy, as consumers rethink borrowing rather than buying cars, apartments and clothes for safety reasons even once the pandemic passes. Business Insider spoke with 10 former Rent the Runway employees. Some were directly impacted by the layoffs and worked at the company as recently as last month, while others left the company over the course of the last 15 months. They said that they thought the company was on solid ground before the pandemic hit. These sources' identities have been confirmed by Business Insider but they requested anonymity because they are not authorized to speak publicly about the company. Unexpected roadblocks for the unicorn Rent the Runway pioneered the concept of women borrowing high-end designer clothes without shouldering the financial burden of purchasing them and has long been heralded as one of the hottest tech startups. Started by Harvard Business School classmates Hyman and Jenny Fleiss, it's raised $337 million and notched a valuation of $1 billion. But the company's ability to expand its retail footprint, grow its business, and go public is now in question. US retail sales, including clothes and accessories bought in stores and online, fell 8.7% in March, according to the Commerce Department — the largest decline in the nearly three decades that the government has tracked the data. Rent The Runway's business is no exception as consumer behavior has shifted in the wake of social distancing and mandatory work-from-home policies. With many customers working remotely, spending $159 a month for an unlimited office wardrobe may no longer make sense. And with few weddings or special events, there's little need for designer dresses. "There's a confluence of factors that, unfortunately, is all running counter to their business," said Sucharita Kodali, VP and principal e-commerce analyst at Forrester. "They're in apparel, where everybody's gasping for air right now; their core customers are not going out anymore; and they may have reservations about renting clothes and receiving packages in the middle of a contagious pandemic." The layoffs at Rent the Runway impacted employees across teams including operations, customer experience, talent, product and business development in offices across the country, a company spokeswoman confirmed to Business Insider. Temporary workers at the company's two distribution centers in Secaucus, New Jersey; and Arlington, Texas, did not have their contracts extended. Rent the Runway has also shelved plans to open an office focused on customer experience in Denver. The company has had growing pains In its first few years, Rent the Runway's business was focused on one-time designer wear rentals. But since then, it's added subscriptions tiers, retail locations, new sustainable brands and categories like home furnishings, and distribution and collection partnerships with companies including WeWork and West Elm. The idea was for the company to ultimately help people rent anything, from dresses to home furnishings, Hyman told CNBC last summer. "Our goal is to be the Amazon Prime of rentals and reach every single person in the US and the world," she said. But that expansion has come with growing pains. The company's culture was the subject of a 2015 Fortune Magazine report that described a "stressful and occasionally hostile" workplace at the startup and documented a high rate of executive churn at the company. In October 2019, a weeklong shutdown affected roughly 14% of subscribers and halted new membership. A recent Medium post by a former employee criticized its handling of COVID-19. While Rent the Runway has bounced back from these stumbles, according to the former employees, some said that they feared that it may not be able to shrug off the impact of the pandemic as easily. The company has said that more than 75% of its revenue is from subscriptions, while the rest comes from one-off rentals and sales of items. A reliance on subscriptions represents a challenge to Rent the Runway's ability to maintain profitability, the former employees said, because subscriptions — particularly the popular unlimited tier — have low margins. Rent the Runway has been creating new subscription tiers (it just launched a new plan between its single swap and unlimited tier that lets members exchange eight items a month), and entering into profit-sharing agreements with new brands and designers. These moves were a bid to improve margins, these former employees said. But the coronavirus coming out of the left field will likely make things harder, they said. "Rent the Runway was headed in the right direction," a former employee told Business Insider. "But it's a tough spot to be in right now, because rental fashion isn't the highest margin business to begin with, and combining that with a recession only makes things worse." Business Insider was unable to pinpoint the precise financial impact of the coronavirus on Rent the Runway's business, but some former employees said that the company is trying to weather the downturn by extending the duration of its sample sale, which is typically done to swap out clothes that can't withstand the dry-cleaning cycle. It is also giving subscription members two bonus spots for swapping clothes to get them to stick to their memberships versus canceling them, according to the former employees. As the coronavirus's spread threatens thousands of businesses and retailers, Rent the Runway's future remains uncertain. "There's not a lot that you can do except ride it out, preserve as much cash as possible, and cut costs with layoffs, salary cuts, and variable expenses with as much of your core assets intact as possible," said Forrester's Kodali. Got a tip about direct-to-consumer startups? Contact this reporter via encrypted messaging app Signal at +1-646-702-2530, email at email@example.com, or Twitter DM at @tanyadua. Join the conversation about this story » NOW WATCH: Why thoroughbred horse semen is the world's most expensive liquid