Welcome to Startups Weekly, a nuanced tackle this week’s startup news and trends by Senior Reporter and Equity co-host Natasha Mascarenhas. To get this in your inbox, subscribe here.
Well, that didn’t take long. In late October, I wrote about how the tide is shifting on tech layoffs, highlighting that 70% of layoffs that happened this yr were conducted over the summer. In reality, using layoffs.fyi data, I claimed that the autumn was shaping as much as be far less gruesome when it comes to net recent events and other people impacted.
Then, things got worse. Since I published that post, quite a few layoffs have been announced from firms including but not limited to Twitter, Meta, Amazon, Chime, Stripe, Lyft, Salesforce and Cisco. (Update: As I put this text together, my colleague Kirsten Korosec broke the news that Nuro laid off 20% of its workforce). (Update #2: Now I’m hearing that Carvana is reportedly going to put off 1,500 employees).
Just a number of weeks ago, 2022 workforce reductions impacted no less than 92,558 known people, per layoffs.fyi. That very same data source now says that the number has grown to 134,739 known people, or a 46% increase.
Put in a different way, I said the summer was bad. But now, nearly as many individuals who were laid off in the summertime months of June, July and August, were laid off in November (and the month isn’t even over).
Speak about a rough begin to November. Based on executives and other industry sources, founders may squeeze more layoffs into the subsequent few days ahead of Thanksgiving and the vacation season. All appear to agree that the worst of the worst is ahead of us — and the true extent of layoffs may only materialize in Q1 2023.
I wasn’t entirely flawed in my poorly aged column. I wrote then that we could be experiencing a reporting delay and that more layoffs may come as company runways dwindle. There are still a great deal of firms that raised a ton of cash over the boom cycle but aren’t producing nearly enough revenue to justify their historical valuations; the late-stage market is filled with them.
Still, to suggest that tech is about to have an enormous reality check is somewhat surprising to me. Isn’t that what this complete yr has been? The one hint that I can latch onto is that some firms have shown us that layoffs have a learning curve — purely because they’ve needed to do multiple round in quick succession, principally underlining, highlighting and bolding that they were unable to chop deep enough the primary time.
I’ll end by saying that I’m working on an end of the yr story concerning the human impact of layoffs, namely where tech talent goes after they’ve been let go. If you happen to lost your job this yr and have an interesting story of what you probably did next, and the way your definition of risk modified, my Twitter DMs are open. Well, no less than so long as the positioning is.
Otherwise, you will discover me on Substack and Instagram and, well, I’m not going to share my LinkedIn just yet but possibly soon. In the remainder of this text, we’ll speak about Elizabeth Holmes, the FTX fall out, eavesdropping and a few corners of the web that made me smile this week.
Elizabeth Holmes gets sentenced
Elizabeth Holmes, the infamous founding father of Theranos, has officially been sentenced to 11.25 years in prison for fraud. The sentencing comes months after Holmes was found guilty on 4 of 11 counts related to defrauding investors. Theranos COO and Homles’ former boyfriend Ramesh “Sunny” Balwani continues to be awaiting his sentencing after being convicted on 12 out of 12 counts in his own trial.
Here’s why it’s essential: The sentencing caps off an extended wait to see how Holmes can be held accountable, if in any respect, for her crimes. Since its launch, the Theranos story has been synonymous with the strengths, and clearly damaging weaknesses, of Silicon Valley hype culture.
I used to be out on vacation (after which out sick) while FTX’s meltdown began. Thankfully, my co-workers gifted me with a ton of content on the actual impact of a crypto exchange collapsing in such a public way. If last week was all concerning the how, this week was all concerning the now what. How do investors, startups and other people within the crypto world move on? And what lasting impacts does FTX’s fall out have? (Regrets don’t count).
Here’s why it’s essential: As we talked about on the pod this week, the human side of all of that is finally beginning to emerge. Take Nestcoin, for instance. The African web3 startup declared that it held lots of its day-to-day money used for operating expenses in FTX. Consequently, it’s shedding employees. We also heard about SoftBank following Sequoia’s lead in marking down its investment, but what I actually care about is how former COO Marcelo Claure addressed the error.
What we lose if we lose Twitter
I’m not going to run you thru the most recent Twitter headlines because, just like the introduction of this text, I’ll probably must update it every hour to incorporate all of the pivots, contradictions and straight up meltdowns which can be happening on the platform. What I’ll do, nevertheless, is run through what we lose if we lose Twitter.
My earnest co-workers, and I, probably the most earnest of all of them, put together a bit of post about why we value Twitter and what disappears if it disappears. Obviously, we’re not saying the platform is dead or going anywhere immediately. But, what if it did?
Here’s a little bit of my excerpt from the TC+ post:
I’m nosy, curious and have a continuing fear that I’m missing key comprehension or a hidden angle on a macroeconomic trend. It’s probably why I’m a reporter (and why I’m hooked on Twitter).
Twitter lets me be an eavesdropping, unassuming fly on the wall. That was essential after I first re-downloaded it in college and subscribed to get a notification each time Boston Business Journal tweeted news — and it’s essential now as I try to know what founders think in real time (versus what they wish to tell a TechCrunch reporter over Zoom). It helped me get up to the mark after I was an intern on the Boston Globe, and it helps me mix in and understand more as a senior reporter at TechCrunch.
Eavesdropping became much more essential to me about one week into the pandemic, which happened to be one week into my job at TechCrunch. It became how I discovered my sources, showing up within the embeds of my stories. It also became how I balanced out my sources, aiming to not only quote the individuals with the spiciest takes in 180 characters. As an early-career reporter, I feel like Twitter gave me a fighting probability at catching as much as all my sensible colleagues and competitors digesting the news in real time. I mean, I literally saw their thought process each day.
All of us heard that Twitter became our town square during quarantine, but for me, it also became a map.
For the remainder of the piece, try our TC+ piece: “TechCrunch staff on what we lose if we lose Twitter.”
tweets and posts section
We’re officially on the time of yr, and a part of the news cycle, after I’m desperately looking for excellent news to spotlight. On Equity this week, we began with some positive growth-focused tech news, including Maven’s growth and the way that helps women’s health, and Alibaba’s expansion despite others’ retreat.
Within the spirit of smiling, listed here are some tweets and jokes from the week that made me smile:
A number of notes
Seen on TechCrunch
Daylight, the LGBTQ+ neobank, raises money to launch subscription plan for family planning
Corporate comms for the startup soul
Fund of funds Sweetwood Ventures bets big on VC’s smallest funds
Meet Unstable Diffusion, the group attempting to monetize AI porn generators
DoorDash rolls out recent safety features for delivery people on its platform
Seen on TechCrunch+
The ability pendulum is swinging back to employers, isn’t it?
Pitch Deck Teardown: Sateliot’s $11.4M Series A deck
Is web3 really the brand new phase of the web?
How Bird clipped its own wings
5 sustainable best practices for bootstrapped startups
If you happen to like this text, do me a fast favor? Forward it to a friend, tell me what you think that on Twitter and follow my personal blog for more content. Within the meantime, I’m taking next week off to benefit from the holiday season with family and friends, so I hope you do the identical. Startups Weekly will likely be back on December 4!