Welcome to Startups Weekly, a nuanced look at this week’s startup news and trends by Senior Reporter and Equity co-host Natasha Mascarenhas. Subscribe here to receive it in your inbox.
Well, that didn’t take long. At the end of October, I wrote about how the tide is shifting on tech layoffs, highlighting that 70% of the layoffs that happened this year were in the summer. In fact, using layoffs.fyi data, I argued that fall would become much less horrifying in terms of net new events and people affected.
Then it got worse. Since I published that post, a number of layoffs have been announced at companies, including but not limited to Twitter, Meta, Amazon, Chime, Stripe, Lyft, Salesforce, and Cisco. (Update: As I was compiling this newsletter, my colleague Kirsten Korosec broke the news that Nuro has laid off 20% of its workforce). (Update #2: Now I hear that Carvana is reportedly going to lay off 1,500 employees).
Just a few weeks ago, the 2022 workforce cuts affected at least 92,558 known people, according to layoffs.fyi. That same data source now says the number has grown 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 yet).
Talk about a rocky start to November. According to executives and other industry sources, the founders may be forcing even more layoffs in the coming days leading up to Thanksgiving and the holiday season. All seem to agree that the worst of the worst is ahead – and that the true magnitude of the layoffs will not materialize until the first quarter of 2023.
I was not entirely wrong in my ill-aged column. I wrote at the time that we may simply be experiencing a slowdown in reporting and more layoffs could be coming as the company’s runways shrink. There are still plenty of companies that raised a ton of cash during the boom, but aren’t generating nearly enough revenue to justify their historic valuations; the late-stage market is full of them.
Still, it’s somewhat surprising to me to suggest that technology is about to undergo a major reality check. Isn’t that what has been all year? The only hint I can remember is that some companies have shown us that layoffs have a learning curve – purely because they’ve had to do more than one round in quick succession, basically underlining, emphasizing and audacious that they weren’t able to to economize. deep enough the first time.
I’ll end by saying I’m working on a year-end story about the human impact of layoffs, 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 is.
Otherwise you can find me at Substack and Instagram and, well, I’m not going to share my LinkedIn just yet, but maybe soon. In the rest of this newsletter, we’ll talk about Elizabeth Holmes, the FTX outage, eavesdropping, and some corners of the internet that made me laugh 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 conviction comes months after Holmes was found guilty of four of 11 investor defrauding charges. Theranos COO and Homles’ ex-boyfriend Ramesh “Sunny” Balwani is still awaiting sentencing after being convicted on 12 out of 12 counts in his own trial.
Here’s why it’s important: The sentencing caps off a long wait to see how Holmes would be held accountable, if at all, for her crimes. Since its launch, the Theranos story has been synonymous with the strong and clearly damaging weaknesses of Silicon Valley hype culture.
I was on vacation (and then sick) as the collapse of FTX began. Fortunately, my colleagues gifted me with a lot of content about the actual impact of a crypto exchange collapsing in such a public manner. If last week was all about the how, then this week was all about the now what. How are investors, startups and people in the crypto world moving forward? And what lasting consequences will the failure of FTX have? (Regrets don’t count).
Here’s why it’s important: As we discussed in the pod this week, the human side of it all is finally starting to emerge. Take Nestcoin for example. The African web3 startup stated that it kept much of its day-to-day cash for operating expenses in FTX. As a result, staff are laid off. We also heard that SoftBank followed Sequoia’s lead in downgrading its investment, but what I really care about is how former COO Marcelo Claure handled the mistake.
What we lose if we lose Twitter
I’m not going to run you through the latest Twitter headlines because, like the introduction of this newsletter, I’ll probably have to update it hourly to include all the pivots, contradictions, and outright meltdowns on the platform. What I’ll do, though, is go through what we lose if we lose Twitter.
My sincere colleagues and I, the most sincere of them all, made a little post about why we like Twitter and what goes away when it goes. Obviously, we’re not saying the platform is dead or going anywhere immediately. But what if it were?
Here’s a piece of my excerpt from the TC+ post:
I’m curious, nosy, and have a constant fear of missing a key understanding or hidden angle on a macroeconomic trend. It’s probably why I’m a reporter (and why I’m addicted to Twitter).
Twitter lets me be an eavesdropping, unassuming fly on the wall. That was important when I first redownloaded it in college and subscribed to get notified every time Boston Business Journal tweeted news – and it’s important now because I’m trying to understand what founders think in real time (versus what they a ukbusinessupdates.com reporter via Zoom). It helped me get up to speed when I was an intern at the Boston Globe, and helps me immerse myself and understand more as a senior reporter at ukbusinessupdates.com.
Eavesdropping became even more important to me about a week after the pandemic, which happened to be a week after my job at ukbusinessupdates.com. It became how I found my sources, showing up in the inclusions of my stories. It also became how I balanced my sources, aiming to not just quote the people with the spiciest takes in 180 characters. As a rookie reporter, I feel like Twitter gave me the chance to keep up with all my brilliant peers and competitors covering the news in real time. I mean, I saw their thought process literally every day.
We’ve all heard that Twitter became our town square during quarantine, but for me it also became a map.
For the rest of the piece, check out our TC+ piece: “ukbusinessupdates.com Employees on What We Lose If We Lose Twitter.”
A good tweets and messages section
We’re officially that time of year and part of the news cycle, where I’m desperate for some good news to highlight. On the Equity side, we started this week with some positive growth-oriented tech news, including Maven’s growth and how it’s helping women’s health, and Alibaba’s expansion despite the withdrawal of others.
In the spirit of smiling, here are some tweets and jokes from the week that made me laugh:
A few notes
Seen on ukbusinessupdates.com
Daylight, the LGBTQ+ neobank, is raising money to launch a family planning subscription
Corporate communication for the startup soul
Fund of Funds Sweetwood Ventures is betting big on VC’s smallest funds
Meet Unstable Diffusion, the group trying to monetize AI porn generators
DoorDash is rolling out new safety features for delivery drivers on its platform
Seen on ukbusinessupdates.com+
The power pendulum swings back to employers, doesn’t it?
Pitch Deck Teardown: Satelliot’s $11.4 Million Series A Deck
Is web3 really the new phase of the internet?
How Bird Clipped Its Own Wings
5 sustainable best practices for bootstrapped startups
If you like this newsletter, would you please do me a favor? Send 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 next week off to enjoy the holidays with friends and family, so I hope you do the same. Startups Weekly is back on December 4th!