Welcome to Startups Weekly, this week’s spotlight on startup news and trends by Senior Reporter and co-host of Equity Natasha Maskerenhas To get this in your inbox, sign up here.
Well, that didn’t take long. In late October, I wrote about how the tide is turning on tech layoffs, revealing that 70% of layoffs this year took place in the summer. In fact, using the layoffs.fyi data, I’d say the recession is shaping up to be more dire in terms of net new events and the impact on people.
Then things got worse. Since I published that post, several shutdowns have been announced from companies including but not limited to Twitter, Meta, Amazon, Chime, Stripe, Lyft, Salesforce, and Cisco. (Update: As I was putting this newsletter together, my colleague Kirsten Korosek broke the news that Living is laying off 20 percent of its workforce). (Update #2: Now I’m hearing that Carvana is about to lay off 1,500 employees.)
A few weeks ago, the 2022 workforce cuts affected at least 92,558 known people, with one layoff. The same data source now says the number has grown to 134,739 known people, or a 46 percent increase.
In a different way, I said that winter is bad. But now, people who were laid off during the summer months of June, July, and August are laid off in November (and the month isn’t even over).
Talk about a rough start to November. According to executives and other industry sources, founders may impose additional cuts in the next few days ahead of the Thanksgiving and holiday season. Everyone seems to agree that the worst is yet to come – and the actual size of the discount may only materialize in Q1 2023.
I’m not entirely wrong about my poor age column. I wrote back then that we were experiencing reporting delays and that more strikes were likely to come as the company’s runways continued to shrink. There are many companies that have raised a lot of money over the growth cycle but not nearly enough revenue to justify their historical valuations. The after-market is full of them.
Still, it’s somewhat strange to me to suggest that technology is about to undergo a major reality check. Isn’t that what this year is all about? The only clue I can come up with is that some companies have shown us that layoffs have a learning curve – because they have to do more than one round in quick succession, basically showing that they can’t line, highlight and cut. Deep for the first time.
I’ll end by saying that I’m working on an end-of-the-year story about the human toll of layoffs, where tech talent goes after they’re laid off. If you lost your job this year and have an interesting story about what you did next and how your risk profile changed My Twitter DMs are open. Well, at least as long as the site exists.
Otherwise, you can find me on Substack and Instagram and, well, I haven’t shared my LinkedIn yet but maybe soon. For the rest of this newsletter, we’ll be talking about Elizabeth Holmes, the FTX crash, eavesdropping, and some corners of the Internet that made me smile this week.
Elizabeth Holmes was convicted.
Elizabeth Holmes, the famous founder of Theranos, was sentenced to 11.25 years in prison for public fraud. The verdict comes months after Holmes was found guilty on four of 11 counts related to defrauding investors. Theranos COO and Homles’ ex-boyfriend, Ramesh “Sunny” Balwani, is awaiting sentencing after being charged with 12 of the 12 counts in his own trial.
Here’s why it’s important: The sentencing ends a long wait to see how Holmes will be held accountable for her crimes. Since the beginning of Theranos’ history, Silicon Valley’s superstition has been synonymous with its strengths and its glaring weaknesses.
When the FTX meltdown started, I was on vacation (and then I was sick). Thank you, my colleagues gave me a gift. With tons of content On the actual impact of the collapse of a crypto exchange in a public way. How last week was all about, what this week was all about now. How do investors, startups and people in the crypto world proceed? And what are the lasting effects of FTX failure? (regrets do not count).
Here’s why it’s important: As we discussed on the pod this week, the human element of all this is finally starting to emerge. Take Nestcoin for example. African start-up Web3 has announced that it is holding most of its day-to-day funds in FTX for operational expenses. With that, he is firing the workers. We’ve also heard about SoftBank following its investment in Sequoia, but what worries me most is how former COO Marcelo Claure handled the mistake.
What we would lose if we lost Twitter.
I don’t run the latest Twitter headlines because, similar to this newsletter entry, I have to update it hourly to include all the polemics, controversies, and straight jokes happening on the forum. What I will do, however, is run through what we’d lose if we lost Twitter.
My sincere colleagues and I, the most diligent of them all, have put together a little post on why we value Twitter and what will be lost if it goes away. Obviously, we’re not saying the platform is dead or going anywhere anytime soon. But, what if it works?
Here is my little excerpt from the TC+ post:
I’m nosy, curious and have a constant fear that I’m missing a key insight or hidden angle of a macroeconomic trend. Probably the reason I’m a reporter (and why I’m a Twitter addict).
Twitter allows me to be an ear-catching, unassuming fly on the wall. It was important when I was first in college and signed up to get notified every time the Boston Business Journal tweeted—and it’s important now when I’m trying to understand what founders are thinking in real time (along with what they have to say). TechCrunch reporter highlighting). He helped me get up to speed when I was an intern at the Boston Globe, and he helped me join and get more help as a senior reporter for TechCrunch.
About a week into the pandemic at my TechCrunch job, it became even more important for me to listen. Turns out I found my sources, appearing in my stories. It just so happened that I balanced my sources with the intention of not mentioning only the most spicy people in 180 characters. As an early career reporter, I feel that Twitter has given me a fighting chance to keep all my talented colleagues and competitors from breaking the news in real time. It means that I actually see their thought process every day.
We’ve all heard that Twitter is our town square during quarantine, but for me it’s also a map.
For the rest, check out our TC+ segment: “TechCrunch staff on what we’d lose if we lost Twitter.
Good tweets and posts section
We’re officially at the time of year, and part of the news cycle, when I’m looking for good news to highlight. At this week’s fair, we’ve started with some positive growth-focused tech news, including Maven’s growth and how it’s helping women’s health, and Alibaba’s expansion despite other retreats.
In the spirit of smiles, here are some tweets and jokes from the week that made me smile:
A few notes
Featured on TechCrunch.
Daylight, LGBTQ+ Neobank, raises funds to launch subscription plan for family planning
Corporate comms for the startup soul
Fund Sweetwood Ventures has a big bet on VC small funds.
Get Unstable Distribution, the team is trying to monetize AI porn generators
DoorDash rolls out new security features to deliver people on its platform.
Featured on TechCrunch+.
The pendulum of power is swinging back to employers, isn’t it?
Pitch Deck Teardown: Satellite’s $11.4M Series A Pitch Deck
Is web3 really the new chapter of the internet?
How a bird clipped its wings
5 sustainable best practices for beginners
If you like this newsletter, do me a quick favor? Pass it on to a friend, tell me what you think On Twitter And follow my personal blog for more content. In the meantime, I’m taking the next week off to enjoy the holiday season with friends and family, so I hope you do the same. Startup Weekly returns on December 4th!