Startup layoffs slowing down, but more employees laid off on average

Finally, some long-awaited good news: the number of newly-reported startup layoffs has been steadily declining for the past 5 weeks, today’s Uber layoff not withstanding. After a coronavirus record of 99 startups conducted layoffs in the first week of April, this past week saw only 22 startups cut jobs, a decline of 78%.

Unfortunately, the number of employees laid off has not benefited from a similar trend. During that same 5-week period, the number of new employees laid off per week dropped from 7,692 to 6,562, a decline of just 15%.

Part of the reason is that even though fewer startups are laying off, the average layoff has gotten bigger. Last week, Stone laid off 1,300 employees and Deliv laid off 669 employees. The week before, Airbnb laid off 1,900, and Juul laid off 900. Including today’s layoff, Uber has cut 6,700 employees in May alone.

In fact, 4 of the 10 biggest tech layoffs since COVID-19 have occurred in just the past two weeks.

Company# Laid Off%IndustryDate
Uber6,70025%Transportation5/6, 5/18
Groupon2,80044%Retail4/13
Airbnb1,90025%Travel5/5
Stone1,30020%Finance5/12
Toast1,30050%Food4/7
Magic Leap1,00050%Consumer4/22
Yelp1,00017%Consumer4/9
Lyft98217%Transportation4/29
Juul90030%Consumer5/5
TripAdvisor90025%Travel4/28

In the early weeks of the coronavirus pandemic, smaller cash-strapped startups were the first to conduct layoffs to avoid going out of business. Later-stage startups and recently-public tech companies had more buffer to hold off on layoffs due to their larger cash reserves. At the time, smaller travel startups like Lola, Remote Year, and WanderJaunt were laying off dozens of employees each even though the likes of Airbnb and TripAdvisor hadn’t yet cut staff.

Two months into nationwide lockdowns, these bigger tech companies couldn’t keep holding off. They’ve now also had enough time to properly budget, plan, and execute their layoffs, something that takes longer at a 4,000-person company than a 40-person one. Small wonder that in the first half of May, it’s felt like dominoes falling when it comes to late-stage startup layoffs.

The media has also started selectively covering only the bigger startup layoffs, as layoffs have gotten too frequent to keep up. We’re still trying, though! The Layoffs.fyi Tracker has counted 430+ startups that have laid off 50,000+ employees since the coronavirus was declared a pandemic, though there are hundreds more layoffs that haven’t been reported publicly.

Uber just announced another mass layoff today, and WeWork expects to continue performing rolling layoffs through the end of the month. But once the smoke clears from those layoffs, will we finally see some ecosystem renewal? Here’s hoping.

Uber and Airbnb’s layoffs rank as two of the biggest in tech since COVID-19

This morning, Uber announced it was laying off 3,700 employees (14%) in its customer support and recruiting teams. The CEO’s letter to staff strongly hints that more cuts are coming in the next two weeks. As many as 5,400 employees are expected to ultimately be laid off.

Yesterday, Airbnb laid off 1,900 employees (25%) across all teams. It expects revenue to fall by more than half in 2020 as global travel stays frozen.

This means that in the past two days alone, we’ve seen two of three biggest tech layoffs since the coronavirus was declared a pandemic on March 11:

Company# Laid Off%IndustryDate
Uber3,70014%Transportation5/6
Groupon2,80044%Retail4/13
Airbnb1,90025%Travel5/5
Toast1,30050%Food4/7
Yelp1,00017%Consumer4/9
Magic Leap1,00050%Consumer4/22
Lyft98217%Transportation4/29
TripAdvisor90025%Travel4/28

Not surprisingly, nearly all of these mass layoffs — including Uber’s and Airbnb’s — can be attributed to shelter-in-place orders. Our previous analysis showed that 2/3 of startup employees laid off have come from industries directly affected by shelter-in-place, such as transportation, travel, real estate, food, and fitness. The layoffs have hurt sales and customer success roles most.

Unfortunately, more big layoffs are still to come. Juul is reportedly planning to lay off 800 to 950 employees, roughly one-third of staff. WeWork, which has already cut thousands of employees across multiple rounds of layoffs, expects to continue making cuts through the end of May. Square has managed to avoid a layoff so far, but remains exposed to small business customers in food and retail that have been shutting down en masse.

Our live Layoffs Tracker is tracking all startup layoffs, and has now tallied over 42,000 employees laid off across 374 companies. Best wishes to those affected and here’s hoping that we reach the bottom soon.

Lyft

Lyft laid off 982 employees

🌎 SF Bay Area βˆ™ πŸ‘© 982 employees (17%) βˆ™ πŸ–₯ All departments

Lyft, the ridesharing startup, laid off 982 employees (17%) yesterday and furloughed 288 more. Rival Uber is reportedly discussing a layoff as well (to the tune of 5,000 people), though those cuts have not been finalized. Lyft and Uber’s revenue have fallen by more than 50% as a result of the coronavirus pandemic.

See below link πŸ‘‡for an opt-in list of Lyft employees laid off, including 35 engineers.

See our live Layoffs Tracker for a real-time report of all startups that have done layoffs.