June brought another wave of layoffs in tech, with cuts impacting roughly the same number of employees as May: 16,000 employees, according to tracker layoffs.fyi. Another layoff aggregator from TrueUp paints a more dire picture, counting 26,000 impacted employees this month, up from about 20,000 last month. Either way, the data is grim.
The end of a second straight month of nearly daily layoffs shows how every startup sector, from mobility to fintech, is impacted by the downturn. Strategy ranges; some companies are laying off specific teams, others are distributing cuts across all departments, and many aren’t responding to comments when asked for further information. There’s also the founders who — within the same breath of their layoff announcement — will make it clear that they are still hiring for strategic roles.
Here are some of the companies that laid off staff this week, and the stated reasons behind those cuts:
Niantic
When Niantic released Pokémon Go in 2016, the company put itself firmly on the map as an AR and mobile gaming company to watch out for. The animal-collecting game earned $500 million in just its first two months, making it one of the fastest-growing mobile games ever. Over the last six (!) years, the hype around the game may have died down, but its profits have only continued to grow, with Niantic earning over $1 billion from from the title’s in-app purchases last year.
But beyond Pokémon Go, Niantic has struggled to replicate the same level of breakthrough success with the other games it’s released, like now-defunct Harry Potter: Wizards Unite or Pikmin Bloom, which also borrows from Nintendo IP.
So, like basically every other tech company right now, Niantic had to make a difficult decision. The company canceled four new projects, including a hyped Transformers game, and let go of 8% of its staff, impacting 85 to 90 employees. Just seven months ago, the company raised $300 million at a $9 billion valuation, 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 pivot. Starting next year, Niantic’s Lightship AR development kit will no longer be free, which could open a new revenue stream for the business.
Byju’s cuts hundreds of jobs
Edtech business Byju rose to prominence over the pandemic as it both helped answer the demand for remote education, and boasted the highest known valuation of any startup in India. This week Byju’s eliminated hundreds of jobs in recent days and pushed back on payments for a $1 billion acquisition that it announced last year, TC’s Manish Singh reports.
The company, last valued at $22 billion, specifically cut hundreds of jobs at two of its latest acquisitions: Toppr, an online learning startup, and WhiteHat Jr, a kids-focused coding platform. Byju’s tells TC that less than 500 people have been impacted by the workforce reduction.
Singh also said that “jobs of about 11,000 employees in India have been eliminated this year due to the market correction (or so has been the single most popular excuse), according to estimates.”
Tesla lays off nearly 200 Autopilot workers, shutters San Mateo office
Tesla laid off the data annotation team working on Autopilot, its advanced driver assistance system, impacting nearly 200 employees. Alongside the workforce reduction, Tesla shut down the San Mateo, California office where Autopilot’s 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 a headcount of 276, and after laying off 195 staffers from all ranks — supervisors, labelers and data analysts — the team is left with 81 workers, who sources say will be relocated to another office.”
Backstage Capital cuts majority of staff after pausing net new investments
Backstage Capital downsized its staff from twelve to three people, managing partner and founder Arlan Hamilton said during her “Your First Million” podcast that was published last Sunday. The layoff comes nearly three months after Backstage Capital narrowed its investment strategy to only participate in follow-on rounds of existing portfolios. This workforce reduction further underscores that the venture capital firm is struggling to grow, both externally and internally.
“It’s not that I feel like there’s any sort of failure on the fund side, on the firm’s side, on Backstage’s side, it’s that this could have been avoided if systems were different if the system we work within were different,” Hamilton said during the podcast.
Hamilton did not respond to requests via email for further comment.
StockX’s second layoff
Shoe resale platform StockX, last valued at $3.8 billion, has laid off 8% of employees, reports The Detroit News. The Detroit-based company has raised nearly $700 million in known capital since its inception in 2016.
This isn’t the first layoff that Stockx has announced: in April 2020, StockX laid off 108 people or 12% of its global workforce. Today’s cuts are slimmer, but show how tensions manifest for the company through two separate economic moments.
Substack cuts 13 employees
After walking back another attempt to raise venture capital, Substack is cutting costs by letting go of 13 employees, who mostly worked in HR and writer support roles.
“Our goal is to make Substack robust even in the toughest economic market conditions, and to set the company up 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, its jobs site lists three engineering roles, a sales rep, a head of growth and a head of HR. As the company matures, it’s also seen great competition: even Twitter is pushing long-form and newsletter products now.
“I’m very sorry. Not long ago, I told you all that our plan was to grow the team and not do layoffs,” Best wrote.
Amount, which was valued at $1B last year, lays off 18% of staff
Amount, a fintech that reached unicorn status last year, has laid off 18% of its workforce, reports Mary Ann Azevedo. In a written statement, CEO Adam Hughes confirmed the percent impacted and said that “due to the current macro-economic environment, we have decided to take some proactive adjustments to ensure Amount’s ability to thrive for years to come. 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 out of Avant, an online lender, in January 2020 to bbuild enterprise software for the banking industry. However, after landing a $99 million Series D last year, this week’s cuts show that the businesses growth is not going as planned.
