June brought another wave of tech layoffs, with cuts affecting roughly the same number of employees as in May: 16,000 employees, according to tracker layoffs.fyi. Another layoff aggregator from TrueUp paints a grimmer picture, counting 26,000 employees affected this month, compared to around 20,000 last month. Either way, the data is grim.
The end of a second straight month of near-daily layoffs shows just how badly every startup sector, from mobility to fintech, is impacted by the recession. Strategic ranges; some companies are laying off specific teams, others are spreading the cuts across departments, and many are not responding to comments when asked for additional information. There are also the founders who – in the same breath of their layoff announcement – will make it clear that they are still hiring for strategic positions.
Here are some of the companies that have laid off staff this week, and the reasons behind the cuts:
When Niantic released Pokémon Go in 2016, the company established itself as an AR and mobile games company to watch. The animal collecting game has grossed $500 million in its first two months alone, making it one of the fastest growing mobile games of all time. Over the past six (!) years, the hype surrounding the game may have died down, but its profits have steadily grown, with Niantic earning over $1 billion from in-app purchases of the title. Last year.
But beyond Pokémon Go, Niantic has struggled to replicate the same level of groundbreaking success with other games it’s released, like now-defunct Harry Potter: Wizards Unite or Pikmin Bloom, which also borrows from Nintendo. IP.
So, like pretty much every other tech company right now, Niantic had to make a tough decision. The company canceled four new projects, including a high-profile Transformers game, and laid off 8% of its staff, affecting 85-90 employees. Just seven months ago, the company raised $300 million at a valuation of $9 billion, more than double its valuation from 2018.
If Niantic can’t make another game as profitable as Pokémon Go, it could still find success as a company selling AR development tools – but that would require a pivot. 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 cuts hundreds of jobs
Edtech Byju has risen to prominence during the pandemic as it has both helped meet the demand for distance education and boasted the highest known valuation of any startup in India. This week, Byju’s cut hundreds of jobs in recent days and pushed back payments for a billion-dollar acquisition announced last year, TC’s Manish Singh reports.
The company, last valued at $22 billion, specifically cut hundreds of jobs in two of its latest acquisitions: Toppr, an e-learning startup, and WhiteHat Jr, a coding platform focused on the children. Byju’s tells TechCrunch that less than 500 people were affected by the downsizing.
Singh also said that “the jobs of about 11,000 employees in India have been cut this year due to the market correction (or so has been the most popular excuse), according to estimates.”
Tesla lays off nearly 200 Autopilot employees, closes San Mateo office
Tesla has laid off the data annotation team working on Autopilot, its advanced driver assistance system, impacting nearly 200 employees. Along with the downsizing, Tesla closed the San Mateo, California office where the Autopilot team worked.
Reports Rebecca Bellan: “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 276 employees, and after laying off 195 employees of all ranks – supervisors, labellers and data analysts – the team ends up with 81 workers, who sources say will be moved to another office.
Backstage Capital cuts majority of staff after suspending net new investments
Backstage Capital has cut its staff from twelve to three, founding managing partner Arlan Hamilton said during his “Your First Million” podcast which was released last Sunday. The layoff comes nearly three months after Backstage Capital reduced its investment strategy to only participate in rounds of monitoring existing portfolios. This downsizing further highlights that the venture capital firm is struggling to grow, both externally and internally.
“It’s not that I feel like there’s some kind of failure on the funds side, on the business side, on the Backstage side, it’s that it could have been avoided if the systems were different if the system we work in was different,” Hamilton said on the podcast.
Hamilton did not respond to email requests for further comment.
Second StockX layoff
Footwear resale platform StockX, last valued at $3.8 billion, has laid off 8% of its employees, reports The Detroit News. The Detroit-based company has raised nearly $700 million in known capital since its inception in 2016.
This is not the first layoff announced by Stockx: in April 2020, StockX laid off 108 people, or 12% of its global workforce. Today’s cuts are thinner, but show how the strains play out for the company through two distinct economic moments.
Substack cuts 13 employees
After backing down from another attempt to raise venture capital, Substack is cutting costs by laying off 13 employees, who worked primarily in human resources and editorial support roles.
“Our goal is to make Substack robust even in the toughest economic market conditions, and to set the business up for long-term success without relying on fundraising – or, at least, to do so solely according to 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 rate. Currently, his job site lists three engineering roles, a salesperson, a growth manager, and a human resources manager. As the company matures, it also faces great competition: even Twitter now offers long-form products and newsletters.
“I’m so sorry. Not long ago I told you all that our plan was to grow the team and not make any layoffs,” Best wrote.
The amount, which was valued at $ 1 billion last year, lays off 18% of staff
Amount, a fintech that achieved unicorn status last year, has laid off 18% of its workforce, reports Mary Ann Azevedo. In a written statement, CEO Adam Hughes confirmed the impacted percentage and said that “Due to the current macro-economic environment, we have decided to make proactive adjustments to ensure Amount’s ability to thrive for coming years. We believe these actions are the prudent thing to do for the long-term health of the company and remain extremely excited about the future.
As Azevedo reports, Amount has raised $243 million to date from investors including WestCap and Goldman Sachs. The startup spun off from Avant, an online lender, in January 2020 to build enterprise software for the banking industry. However, after snagging a $99m Series D last year, this week’s cuts show business growth isn’t going as planned.