Welcome to Startups Weekly, a nuanced take on this week’s startup news and trends from senior reporter and equity co-host Natasha Mascarenhas. To get this in your inbox, subscribe here.
Well, that didn’t take long. I wrote about it at the end of October how the tide is changing in tech layoffs, It should be emphasized that 70% of the redundancies this year were carried out in the summer. In fact, using data from Layoffs.fyi, I asserted that fall would turn out to be far less cruel in terms of new net events and people affected.
Then it got even worse. Since I published this post, a number of company layoffs have been announced 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 Korosec broke the news that Nuro laid off 20% of his workforce). (Update #2: Now I hear that Carvana will reportedly lay off 1,500 workers).
Just weeks ago, the 2022 workforce reductions affected at least 92,558 known people, per Layoffs.fyi. The same data source now says the number has grown to 134,739 known people, a 46% increase.
In other words, I said the summer was bad. But now almost as many people who were laid off during the summer months of June, July and August have been made redundant in November (and the month isn’t even over yet).
Talk about a bumpy start to November. According to executives and other industry sources, founders could make more layoffs in the days leading up to Thanksgiving and the holiday season. Everyone seems to agree that the worst of the worst is ahead of us — and the true scale of the layoffs may not materialize until the first quarter of 2023.
I wasn’t entirely wrong in my ill-aged column. I wrote at the time that we may just see a delay in reporting and that there could be more layoffs as corporate runways dwindle. There are still plenty of companies that raised a lot of money during the boom cycle but aren’t generating nearly enough revenue to justify their historical valuations; The late-stage market is full of them.
Still, it comes as a bit of a surprise to me to suggest that the technology is about to have a major reality check. Hasn’t that been all year? The only clue I can take is that some companies have shown us that layoffs have a learning curve – just because they had to do more than one lap in quick successionbasically underlining, emphasizing and bold that they couldn’t cut deep enough the first time.
Finally, I’d like to say that I’m working on an end-of-the-year story about the impact of layoffs on people, which is 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 definition of risk changed, My Twitter DMs are open. Well, at least as long as the site exists.
Otherwise find me on substack and Instagram and, well, I won’t be sharing my LinkedIn yet, but maybe soon. In the rest of this newsletter we talk about Elizabeth Holmes, the FTX outage, wiretapping and some corners of the internet that made me smile this week.
Elizabeth Holmes is convicted
Elizabeth Holmes, the infamous founder of Theranos, was officially sentenced to 11.25 years in prison for fraud. The conviction comes months after Holmes was found guilty on four of 11 counts related to defrauding investors. Therano’s COO and former friend of Homles, Ramesh “Sunny” Balwani, is still awaiting sentencing following his conviction 12 out of 12 counts in his own process.
Therefore it is important: The conviction caps a long wait to see Holmes be held accountable, if at all, for her crimes. Since its inception, the Theranos story has been synonymous with the strengths and clearly pernicious weaknesses of Silicon Valley’s hype culture.
I was on vacation (and then sick) when FTX’s meltdown began. Luckily, my colleagues gave me presents with tons of content about the actual ramifications of such a public collapse of a crypto exchange. If last week was all about the how, this week was all about the now. What’s next for investors, startups and people in the crypto world? And what are the lasting effects of the failure of FTX? (Regrets don’t count).
Therefore it is important: As we talked about on the sleeve this week the human side of it all is finally starting to emerge. Take Nestcoin for example. The African Web3 startup said it holds a majority of its daily cash used for operational expenses in FTX. As a result it is laid off employees. We’ve also heard that SoftBank followed Sequoia’s lead in reducing its investment, but what really matters to me is as former COO Marcelo Claure addressed the bug.
What We Lose When We Lose Twitter
I’m not going to take you through the latest Twitter headlines because, similar to the launch of this newsletter, I’ll probably have to update it every hour to include all the linchpins, contradictions, and outright meltdowns happening on the platform. However, what I will do is go over what we lose when we lose twitter.
My serious colleagues and I, being the most serious of them all, made a little post about why we value Twitter and what disappears when it disappears. Obviously we’re not saying the platform is dead or going anywhere immediately. But what if it were?
Here is a small excerpt from the TC+ post:
I’m curious, inquisitive, and constantly afraid that I’m missing a key understanding or hidden angle of a macroeconomic trend. That’s probably why I’m a reporter (and why I’m addicted to Twitter).
Twitter lets me be a listening, humble fly on the wall. That was important when I first re-downloaded in college and subscribed to get a notification every time the Boston Business Journal tweeted news — and it’s important now as I try to understand what founders are thinking in real-time (contrary to what they want to tell a TechCrunch reporter via Zoom). It helped me stay connected when I was an intern at the Boston Globe, and it helps me fit in and better understand myself as a senior reporter at TechCrunch.
Wiretapping became even more important to me about a week into the pandemic, which happened to be a week into my job at TechCrunch. That’s how I found my sources, which showed up in the embeds of my stories. That’s also how I balanced my sources, aiming to not just cite the people with the sharpest takes in 180 characters. As a reporter early in my career, I feel like Twitter has given me a fighting chance to catch up with all my brilliant colleagues and competitors who digest the news in real time. I mean I saw her thought process literally every day.
We’ve all heard that Twitter became our marketplace during the quarantine, but for me it also became a map.
For the rest of the piece, see our TC+ piece: “TechCrunch staff on what we lose when we lose Twitter.”
A good area for tweets and posts
It’s officially the time of year and part of the news cycle that I’m desperate for good news to highlight. On equity this weekwe started with some positive growth oriented tech news including Maven’s growth and how it helps women’s healthand Alibaba’s expansion despite withdrawal from others.
In the spirit of smiling, here are some tweets and jokes from the week that made me smile:
A few notes
Seen on TechCrunch
Seen on TechCrunch+
If you like this newsletter, would you do me a quick 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 the next week off to enjoy the holiday season with friends and family, so I hope you do the same. Startups Weekly will be back on December 4th!