OK, I take back what I said about tech layoffs • TechCrunch

Welcome to Startups Weekly, a breakdown of this week’s startup news and trends from Equity’s Senior Reporter and co-host Natasha Mascarenhas. To get it in your inbox, sign up here.

Well, that didn’t take long. In late October, I wrote about how the tide is turning in tech layoffs, noting that 70% of layoffs this year took place over the summer. In fact, using the layoffs.fyi data, I argued that the decline was shaping up to be far less horrific in terms of net new events and people affected.

Then things got worse. Since I published this post, several layoffs have been announced by companies, including but not limited to Twitter, Meta, Amazon, Chime, Stripe, Lyft, Salesforce, and Cisco. (Update: As I was preparing this newsletter, my colleague Kirsten Korosec broke the news that Nuro has laid off 20% of its workforce). (Update #2: I’m now hearing that Carvana is reportedly laying off 1,500 workers).

Just a few 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 risen to 134,739 known people, or 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 were laid off in November (and the month isn’t even over).

Talk about a rough start to November. The founders may push for more layoffs in the coming days ahead of Thanksgiving and the holiday season, according to executives and other industry sources. Everyone seems to agree that the worst of the worst is ahead – and the true extent of the layoffs may not take place until the first quarter of 2023.

I wasn’t completely wrong in my bad age column. I wrote then that we may just be facing a reporting delay and that more layoffs may be coming as corporate corridors shrink. There are still plenty of companies that raised a ton of money during the boom cycle but aren’t generating nearly enough revenue to justify their historical valuations. the end-stage market is full of them.

However, to suggest that technology is about to do a major reality check is somewhat surprising to me. Isn’t that what this whole year has been like? The only hint I can latch on to is that some companies have shown us that layoffs have a learning curve—purely because they had to do more than one round in a row, basically highlighting, highlighting, and highlighting that they couldn’t cut deep enough the first time.

I’ll close by saying that I’m working on a year-end story about the human impact of layoffs, which is where tech talent goes after they’re fired. If you lost your job this year and have an interesting story about what you did next and how the definition of risk changed, My Twitter DMs are open. Well, at least as far as the site is concerned.

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 FTX, eavesdropping, and some corners of the internet that made me smile this week.

Elizabeth Holmes is convicted

Elizabeth Holmes, the infamous founder of Theranos, has been officially sentenced to 11.25 years in prison for fraud. The sentencing comes months after Holmes was found guilty on four of 11 counts related to defrauding investors. Theranos COO and former friend of Homles, Ramesh “Sunny” Balwani, is still awaiting sentencing after being convicted of 12 of the 12 charges 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 her crimes. Since its launch, Theranos’ story has been synonymous with the strengths and clearly damaging weaknesses of Silicon Valley’s hype culture.

Image Credits: Justin Sullivan/Getty Images

FTX update

I was away on vacation (and then sick) while the FTX meltdown began. Fortunately, my colleagues gave me a gift with a ton of content about the actual impact of a cryptocurrency exchange collapsing in such a public manner. If last week was all about the how, this week was all about the now what. How are investors, startups and people doing in the world of cryptocurrencies? And what lasting impact does the fall of FTX have? (Regrets don’t count).

Here’s why it’s important: As we talked about in the pod this week, the human side of all of this is finally starting to emerge. Take Nestcoin, for example. African startup web3 said it held much of its daily cash used for operating expenses in FTX. As a result, he lays off employees. We’ve also heard about SoftBank following Sequoia’s lead in downsizing, but what I’m really interested in is how former COO Marcelo Claure handled the mistake.

FTX logo broken and on fire

Image Credits: Bryce Durbin / TechCrunch

What do we lose if we lose Twitter?

I’m not going to show you the latest Twitter headlines because, as in the intro of this newsletter, I’ll probably have to update it every hour to include all the points, contradictions, and downright meltdowns happening on the platform. What I will do, however, is go over what we lose if we lose Twitter.

My honest colleagues, and I, the most serious of them all, put together a little post about why we value Twitter and what goes away if it goes away. Obviously, we’re not saying the platform is dead or going anywhere anytime soon. But what if it did?

Here is an excerpt from my TC+ post:

I’m inquisitive, curious, and constantly afraid that I’m missing a key understanding or a hidden angle on a macro trend. That’s probably why I’m a reporter (and why I’m addicted to Twitter).

Twitter lets me eavesdrop, unassuming fly on the wall. This was important when I downloaded it back in college and signed up to get a notification every time the Boston Business Journal posted news — and it’s important now as I try to understand what founders are thinking in real time (versus what they want to say TechCrunch reporter via Zoom). It helped me get up to speed when I was an intern at the Boston Globe, and it helps me blend in and understand more as a senior reporter at TechCrunch.

The 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 my story embeds. It also became how I balanced my sources, aiming to not just list the people with the spiciest takes in 180 characters. As a reporter in the early stages of my career, I feel that Twitter has given me an opportunity to reach out to all of my brilliant colleagues and competitors who digest 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 piece, check out our TC+ piece: “The TechCrunch staff on what we’re missing if we lose Twitter.”

The melting Twitter.

Image Credits: Bryce Durbin/TechCrunch

A good section of tweets and posts

We’re officially at the time of year and part of the news cycle when I’m desperate for good news to highlight. In Equity this week, we kicked off with some positive growth-focused tech news, including Maven’s growth and how it’s helping women’s health and Alibaba’s expansion despite others retreating.

In the spirit of smiling, here are some tweets and jokes from the week that made me smile:

illustration of birds with speech bubbles

Image Credits: Bryce Durbin / TechCrunch

A few notes

Featured on TechCrunch

Daylight, LGBTQ+ neobank, raises cash to launch family planning subscription program

Corporate comms for the soul of startups

Fund of funds Sweetwood Ventures is betting big on smaller VC funds

Meet Unstable Diffusion, the team trying to monetize AI porn generators

DoorDash is rolling out new security features for people delivering on its platform

Featured on TechCrunch+

The pendulum of power swings back to 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 the bird clipped its wings

5 Sustainable Best Practices for Bootstrap Startups

If you like this newsletter, do me a quick favor? Forward this to a friend, let me know what you think on Twitter and follow my personal blog for more content. In the meantime, I’m taking next week off to enjoy the holidays with friends and family, so I hope you do the same. Startups Weekly will be back on December 4th!

Better,

N

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