Welcome to Startups Weekly, a nuanced take on this week’s startup news and trends from Senior Reporter and co-host of Equity Natacha Mascarenhas. To get it delivered to your inbox, subscribe here.
Well, it didn’t take long. At the end of October, I wrote about how the tide is changing on tech layoffs, pointing out that 70% of the layoffs that happened this year were done over the summer. In fact, using data from layoffs.fyi, I claimed that the fall is shaping up to be much less gruesome in terms of net new events and people affected.
Then things got worse. Since I published this article, a number of layoffs have been announced at companies including Twitter, Meta, Amazon, Chime, Stripe, Lyft, Salesforce, and Cisco. (Update: As I was preparing this newsletter, my colleague Kirsten Korosec announced that Nuro had laid off 20% of its workforce). (Update #2: I hear now that Carvana is going to lay off 1,500 workers).
Just a few weeks ago, the 2022 workforce reductions affected at least 92,558 known people, per layoffs.fyi. That same data source now says the number has risen to 134,739 known people, a 46% increase.
In other words, I said summer was bad. But now almost as many people who were laid off in the summer months of June, July and August, have been laid off in November (and the month isn’t even over).
Talk about a tough start to November. According to executives and other industry sources, the founders could press for more layoffs in the coming days before Thanksgiving and the holiday season. All seem to agree that the worst of the worst is ahead of us – and the true scale of layoffs may only materialize in the first quarter of 2023.
I wasn’t entirely wrong in my badly aged column. I then wrote that we may just be experiencing a reporting delay and that more layoffs may occur as the company’s leads narrow. There are still plenty of companies that raised a ton of money during the boom cycle, but aren’t producing enough revenue to justify their historical valuations; the late-stage market is full of them.
Still, to suggest that technology is about to have a big reality check surprises me somewhat. Isn’t that what this whole year has been like? The only clue I can hold on to is that some companies have shown us that layoffs have a learning curve – simply because they had to do more than one round in quick succession, underlining, highlighting and fat that they were unable to cut deep enough the first time.
I’ll end by saying that I’m working on a year-end story about the human impact of layoffs, where tech talent goes after being laid off. If you lost your job this year and have an interesting story about what you did next, and how your definition of risk changed, my Twitter DMs are open. Well, at least as long as the site is.
Otherwise, you can find me on Substack and Instagram and, well, I’m not going to share my LinkedIn yet but maybe soon. In the rest of this newsletter, we’ll talk about Elizabeth Holmes, the fall of the FTX, eavesdropping, and a few corners of the internet that made me smile this week.
Elizabeth Holmes is sentenced
Elizabeth Holmes, the infamous founder of Theranos, was officially sentenced to 11.25 years in prison for fraud. The sentencing comes months after Holmes was convicted on four of 11 charges related to the investor scam. Theranos chief operating officer and Homles’ former boyfriend, Ramesh “Sunny” Balwani, is still awaiting sentencing after being found guilty on 12 out of 12 counts in his own trial.
Here’s why it’s important: The conviction caps a long wait to see how Holmes would be held accountable, if at all, for his crimes. Since its launch, Theranos’ story has been synonymous with the clearly detrimental strengths and weaknesses of Silicon Valley’s hype culture.
I was on vacation (then sick) when the FTX crisis started. Fortunately, my colleagues offered me with a ton of content on the real impact of a crypto exchange collapsing in such a public way. If last week was about how, this week was about now what. How are investors, startups and people in the crypto world evolving? And what lasting impacts does the fall of FTX have? (Regrets don’t count).
Here’s why it’s important: As we talked about on the pod this week, the human side of it all is finally starting to emerge. Take Nestcoin, for example. The African web3 startup said it holds much of its daily cash used for operating expenses in FTX. As a result, he is laying off employees. We’ve also heard of SoftBank following Sequoia’s lead by cutting its investment, but what really matters to me is how former COO Marcelo Claure corrected the mistake.
What we lose if we lose Twitter
I’m not going to introduce you to the latest headlines from Twitter because, like the intro to this newsletter, I’ll probably have to update it hourly to include all the direct pivots, contradictions and meltdowns happening on the platform. . What I’m going to do, though, is go over what we lose if we lose Twitter.
My serious colleagues, and I, the most serious of them all, wrote a little article explaining why we like Twitter and what disappears if it disappears. Obviously, we’re not saying the platform is dead or going anywhere immediately. But, what if it was?
Here is a bit of my excerpt from the TC+ post:
I’m nosy, curious, and constantly afraid of missing a key insight or hidden angle on a macro trend. That’s probably why I’m a journalist (and why I’m addicted to Twitter).
Twitter allows me to be a low-key, low-key fly on the wall. It was important when I re-downloaded it in college and subscribed to get notified whenever the Boston Business Journal tweeted news – and it’s important now that I’m trying to figure this out. what founders are thinking in real time (vs. what they want to say to a TechCrunch Reporter on Zoom). It helped bring me up to speed when I was an intern at the Boston Globe, and it helped me fit in and understand better as a senior reporter at TechCrunch.
Eavesdropping became even more important to me about a week into the pandemic, which happened to be a week into my job at TechCrunch. It became how I found my sources, appearing in the embeds of my stories. It also became how I balanced my sources, with the goal of not just quoting the people with the spiciest takes in 180 characters. As an early-career journalist, I feel like Twitter has given me a chance to catch up with all of my brilliant colleagues and competitors who are digesting the news in real time. I mean, I literally saw their thought process every day.
We’ve all heard that Twitter has become our town square during quarantine, but for me, it’s also become a map.
For the rest of the article, see our TC+ article: “TechCrunch staff on what we lose if we lose Twitter.”
A good section of tweets and messages
It’s officially that time of year, and part of the news cycle, where I’m desperate for good news to highlight. On Equity this week, we started with positive growth-focused tech news, including Maven’s growth and how it’s helping women’s health, and Alibaba’s expansion despite others’ setbacks.
In the spirit of a smile, here are some tweets and jokes from the week that made me smile:
A few comments
Seen on TechCrunch
Daylight, the LGBTQ+ neobank, raises funds to launch a family planning subscription plan
Corporate communication for the startup soul
Fund of funds Sweetwood Ventures bets big on smaller VC funds
Meet Unstable Diffusion, the group trying to monetize AI porn generators
DoorDash rolls out new safety features for delivery people on its platform
Seen on TechCrunch+
The pendulum of power rests with the employers, doesn’t it?
Pitch Deck Teardown: Sateliot’s $11.4 Million Series A Deck
Is web3 really the new phase of the internet?
How Bird clipped his own wings
5 sustainable best practices for bootstrap startups
If you like this newsletter, do me a favor? Forward it to a friend, tell me what you think on Twitter and follow my personal blog for more content. In the meantime, I’m taking time off next week to enjoy the holidays with my friends and family, so I hope you’ll do the same. Startups Weekly will be back on December 4!