Do you think market is Bad for venture capitalistsbut what about the actual workers behind the tech companies they support?
Reluctantly, we are writing a Technical Layoffs Roundup for third week in a row, because again there has been a reduction across stages and sectors. Over the past month, public and private tech companies have been announcing massive layoffs across sectors. Staff at Section4, Carvana, DataRobot, Mural, Robinhood, On Deck, Thrasio, MainStreet and Netflix were affected by layoffs. Some big companies are freezing hiring, like Twitter and Meta, or announcing strategic shifts, like Uber.
As we put it when we covered the layoffs sweeping the tech industry: Layoffs don’t happen to companies, they happen to peopleEspecially for tech employees in the U.S., layoffs mean not just lost income — but also a medically dangerous loss of health care.
Let’s see which companies announced production cuts this week.
A Netflix representative wrote in an emailed statement: “As we explained in terms of earnings, our slowing revenue growth means we also have to slow our cost growth as a company.” Netflix reported, Revenue in the first quarter of 2022 was $7.87 billion, with a massive loss of 200,000 users.
Contractors are also affected by these layoffs, but the number of workers affected in the designation is unclear. TechCrunch asked Netflix about reports of layoffs of employees who run various social channels like Strong Black Lead, Golden, Most, and Con Todo, but Netflix says the company has decided not to renew contracts with some agencies that have hired contractors in the past . Still, it doesn’t feel good to see queer people and people of color lose their jobs, which helps Netflix cater to those audiences.
Picsart’s unicorn status doesn’t save it
Less than a year ago, Picsart raised $130 million from SoftBank, and the visual creation tools startup entered the unicorn space with a valuation of more than $1 billion. As a leaner, sleeker version of Adobe, things seem to be in the doldrums for Picsart, 8% layoffs Its employees affected 90 people this week.Other SoftBank-backed companies such as cameoIt also became a unicorn last year and just made layoffs. When Alex Wilhelm last covered Picsart, he pointed out The company was expected to go public — which still hasn’t happened, and could be a clue as to what’s happening at the company to prompt such layoffs.
Cars24, a used-car marketplace that venture capital investors recently valued at $3.3 billion, cut 600 jobs this week, or 6% of its workforce. The Series G startup just raised $400 million, which makes the reduction more due to runway lengthening than a lack of ability to pay the bills.
As our own Manish Singh reports, Cars24 is one of many Indian startups that have laid off staff in the past few weeks. Staff at Vedantu, Unacademy, Meesho, OkCredit, Trell, Furlenco and Lido also cut several positions, he said.
Market startups, such as Cars24, feel especially vulnerable during a downturn. Consumer spending habits can become extremely capricious, which means demand can fall while supply remains stable or even grows. Balancing these two aspects is the greatest art of any market startup, but predicting revenue stability becomes especially difficult when everyone else is on hold.
Skillz shrinks esports business team
Earlier this week, esports company Skillz laid off 70 employees, or about 10 percent of the team, the company confirmed to TechCrunch. No executives were affected by the layoffs.
“We have decided to restructure our resources and investments to increase our profitable growth and further our vision of building a competitive layer on the Internet,” the company said in an emailed statement. “This adjustment has resulted in changes to some of our projects, and therefore changes to the people on our team, as we prioritize our resource levels to continue delivering a great player experience and enable more game developers to bring their creations to life.”
The company’s statement is ironic; it’s paring back its internal community to better support its external community. The company said it plans to continue hiring in certain areas of the business, but did not mention which areas.