After Silicon Valley woke up to the economic crisis last week and VCs rang the alarm bells, startups are starting to heed the call and tighten their belts for a long winter. As the slide above from Sequoia Capital illustrates, belt-tightening now may be the most prudent thing a startup can do. While nobody likes layoffs, least of all the employees losing their jobs, it increases a startup’s chance for survival by reducing how much cash they burn each month.
This week alone, we’ve seen layoffs at Zillow, Pandora, Zivity, AdBrite, Hi5, Jive Software, and Redfin (which laid off 20 people). The week before was Seesmic, and before that eBay. We’re hearing rumblings of more to come.
It’s hard to keep up with it all. So we’ve created a simple Layoff Tracker to keep count. We’ll add layoff data here for tech companies big and small going forward. Hopefully, all the companies on this list will come out stronger on the other end.
If you know of any that have been overlooked, please submit a tip with the name of the company and number of layoffs. If it’s been covered, also send a link to the blog post or news article.
[Image attribution: Sequoia Capital]
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wow @ ebay thats alot of jobless folks.
There’s something I really don’t understand here.
Take a company like Seesmic. They got $12M from VC money. Let’s assume that when Loic started his company, he planned on having zero revenue for at least 2 years.
Once he got paid the $12M, I assume he submitted to the VCs a budget for these 2 years, and distribute, say, $6M per year.
The problem is that all this was planned AHEAD of the financial crisis. So what’s changed since Wall Street Meltdown?
For a company like Seesmic: nothing. They still have their $6M to spend per year.
Or maybe is it that when TechCrunch announces a startup raises funds from a VC, this is all virtual money and only part of the amount is actually disbursed by the VC and that the financial crisis had them revised the initial attributed amounts.
Please someone explains.
Because if Seesmic effectively received these $12M prior the financial crisis, there’s absolutely no excuse for laying off employees who already were budgeted for the coming year and covered by the $12M. Right?
Thus my conclusion is that all these startups with ZERO revenue and that raised VC money prior the crash are just using it as an excuse to get rid of some unwanted or inefficient employees, and it has nothing to do with the crisis.
I disagree. Start-ups with zero revenue that raised VC money prior to the cash crunch are laying off because we’re thinking about the timing for raising our next round of financing. Given that VCs are a little (understatement) spooked by Sequoia’s death prediction, we are a little spooked that they will not be as loose with their investments. Early stage start ups thinking of raising a new round in the next 8 months SHOULD think about laying off employees to extend their runway until there is a clearer picture of the investing environment. Not preparing for the worst today will seem irresponsible tomorrow.
Well, after the execs dumped money into their new cars, SOMA apartments, and lavish parties, they weren’t worried because they’d just raise more money from another series of funding. Then Sequioa came along and said, we probably won’t be dumping more money into worthless startups. The execs at Seesmic thought, ‘oh shizznit, that means us.’ Hence the need to lay off folks since they already blew the money on some other worthless crap.
Seriously look at most of these companies, many are media-ish companies who are still hoping this advertising model crap pans out even though everyone’s attempt is just an also-ran of someone else’s attempt that didn’t work out. I can’t even get a straight answer from people even at EBay as to why they were that size to beging with. I’m sure some of their questionable acquisitions don’t help either.
Plenty of startsups not worried and also hiring.
HotGeekChic,
how about starting to make money instead of laying-off? Is that too much to ask? Couldn’t Seesmic (for exampel) start making money by selling its concept to online schools or business intranets (just a cue)?
Or how about cutting on crappy spendings like highly produced daily videos nurturing CEO’s ego (Seesmic) and expensive pointless parties?
American startups expect unlimited funds as if they were in soviet union. This non-sense is hilarious and reveals - if need be - startup CEOs’ disrespect for their own employees.
______________________
ghunda
You’re spot on.
According to venturebeat, you need to add SearchMe.
http://venturebeat.com/2008/10.....-job-cuts/
Do these companies ever think of the effect of these layoffs on the state & economy as a whole? I mean, the states have to pick up the bill for this & the companies have to just pay little for unemployment insurance right?
So, in this dire economy, what happens when unemployment benefits for the unemployed runs out?
For example, already 800,000 peoples benefits have already stopped just last week. That’s like saying 800,000 mortgages unpaid, and leading to 800,000 foreclosed homes. No one is talking about this in the news but will soon be a major problem.
Bottom line is, the more unemployed out there, and without the people getting the support, people are not able to look for those new jobs. We have a lot of HOPING out there right now. http://www.unemployedworkers.o...../index.cfm
I think, companies should not be laying off. But to innovate & build on their core competencies by making their existing products/services better. I really believe that any company that is laying off now, especially in the start-up realm, will not survive in 2009.
Anyone else have competing thoughts?
Yes, ignore reality, that’s what companies should do! Keep employing people even though revenue is declining. That way, the whole company can go under and even more people can be without a job! You putz.
And unemployment insurance is not a ‘little’ fee. Companies pay it in good times and in bad, whether they’re hiring or firing. That way, when they do fire people, the money has already been paid for their unemployment. This is the concept of insurance!
Yeah, you putz!
Yeah You Putz!!
Someone needs to do a fuckedcompany2.0.com start up…
No worries. Some idiot is already browsing around spamming his poor me-too attempt.
TM,
Trying to do it.. Already had 3 Rumors submitted to web2.0fuckedcompany.com
Looking for people to help me if you are interested?
Thanks,
Looks like some is working on it:
Whois Record
Registrant:
TechCrunch
44 James Avenue
Atherton, California 94027
United States
Domain Name: FUCKEDCRUNCH.COM
Created on: 31-Mar-07
Expires on: 31-Mar-10
Last Updated on: 10-Jul-08
Administrative Contact:
Arrington, Michael
TechCrunch
44 James Avenue
Atherton, California 94027
United States
3109437084 Fax —
Technical Contact:
Arrington, Michael
TechCrunch
44 James Avenue
Atherton, California 94027
United States
3109437084 Fax —
Domain servers in listed order:
NS39.DOMAINCONTROL.COM
NS40.DOMAINCONTROL.COM
TechCrunch owns a lot of domain names. Doesn’t mean we’re going to do anything with them.
Erick, i had to do it. I just wrote a list of 20 companies that are hiring, not firing in Web 2.0.
TC owns alot of domains? how many? Where are they? Dont be squatting on them.
When there is a focus natural language domain names maybe we will finally get a truly interesting article or two about the future of tech and where its “headed” or “located” depending on “who and how” you look at it.
Read a Great article regarding the power of natural language domain name location.
http://www.ricksblog.com/my_we.....s-bra.html
My Question: “who” owns the greatest strategic natural language domain portfolio on the internet? ( not that i expect anyone will respond to my question with any meaningful reply or debate. Most here dont have a clue about the industry, yet they have no problem babbling about it )
CapitalDomain.com-Location Experts
Sorry, the correct address is: http://www.unemployedworkers.o....._benefits/
This is totally unneccesary and is almost like you are gloating at the demise of people’s jobs by turning it into a game.
I fully agree. This is pretty grim.
I’ve been reading TC for a little over a year, and this is just pathetic. I don’t understand why you want to make this a spectacle.
Would you rather we ignore it?
We’re a news site and this is important news. It’s hardly gloating when we include statements like “Hopefully, all the companies on this list will come out stronger on the other end. “
Announcing layoffs occurring at company X is news. Setting up a ’score card’ is sensationalism. Sorry but I completely disagree with the ‘news value’ of this.
You’re the one calling it a score card, not us.
‘layoff tracker’, ’score card’. What’s the difference?
The difference is that “score” implies ranking. It’s just a list. Nothing extra, nothing sensational.
I think TC has been respectful. I on the other hand love to gloat about the downfall of all these ridiculous startup experiments.
It’s not a game and we are not gloating. Pulling together this information is valuable. It puts each layoff announcement in context of what is going on in the tech industry as a whole, rather than reading about these piecemeal.
It’s data and therefore it’s useful.
Wow, you honestly believe that the way in you have presented this is valuable?
Assuming this info is available, it would be helpful to see layoffs in terms of % of staff… or at least how many employees there were prior to the layoff.
we’re adding this now
HENDRICKSONNNNNNNNNNNN!!! The post is STILL NOT UP!!!
Hahaha… I’m channeling visions of Mr. Spacely with that one. The three hour days must be killing Hendrickson’s button pushing finger.
It would be nice to have a column that shows either the original (pre-layoff) or current size of the companies.
is there also a “hiring” tracker too?
That’s a great idea. Would have to figure out how to do it. Maybe linked to job listings.
ya, its called CrunchBoard
Google
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we’re working on fixing this, sorry for the downtime
Also add Heavy.com according to AlleyInsider, -12 heads
ditto last user. Guess it’s a “beta” app that was inserted.
Mike - why don’t you just takeover F*dCompany from Pud? It’s controversial; and obviously good for this economic shakeup. Only reason you wouldn’t is the association of TC’s brand with that, in regards to future sponsors. Maybe it doesn’t make sense, but it has brand equity.
I made a site trying to recreate F*cked Company
web2.0fuckedcompany.com
Quit spamming. Your site sucks.
20 people have been laid off at heavy.com….
MocoSpace is hiring. Please check out our openings at http://www.jnjmobile.com
Why when I put my mouse over one of the company’s name, it shows a link to google with a redirect to crunchbase? Just curious… Is that some type of SEO trick?
Google Docs embed
wow put this way, you really see the scale of ebay’s layoff
Where’s Yahoo???
Yahoo doesn’t have time to lay off people as most of them already left….
I have a feeling Yahoo! will be joining that unpleasant list soon.
Dayum, now Adbrite?
it is inevitble that in less than 10 years the will be no such thing as a startup. Just individuals and businesses battling for premium location inventory to channel there products or services on existing premium or niche web channels.
Innovation “Startups” will have vanished.
The best established “Startins” will rule the net. You heard it here first.
I would still like to take a moment to inspire those jobless in the tech industry to think outside the box, never surrender, keep pushing, keep all your windows open. There is still alot of opportunites for those that push the envelope. In this tech industry only the strong, unique, experienced, diversified web services will survive. Integrate Yourself ASAP!
MyLocator
God you’re a dumbass…
your my bitch.
If I was an investor, I would look at these as good Layoffs… In fact, I own shares in one of the companies listed here and honestly it makes me happy to know they are try to become more profitable. By unloading high salaries and dumping unproductive people, they will get more productivity from their current staff and if they need to hire they can hire people for much less…
With no capital on the horizon companies will have to create real businesses… This will be fun to watch play out…
Yo don’t have investments in any of those companies, just your own trash company website. Go away.
The amount of layoffs during this economic downturn is going to definitely fuel this vicious circle. I hope my company will ride this whole thing out.
Someone asked in the comments so… Adify is hiring, 150+ people in the next 12 months. See the website.
it would be MUCH more useful if you were to simply common-size all numbers - either express all as an approximate percentage of total workforce, or express all as hard numbers, or both - but mixing numbers, percentages and X+ is worthless and visually impossible to evaluate quickly or accurately…
Second using percentage figures.
Agreed. Problem is that these are private companies and not all of them are willing to reveal total headcount numbers. If you have the data, give it to us and we’ll update.
VC’s have been low balling development since the bubble burst, which again was a a was man made burst, and sequoia was right there in the middle of it. Now he’s getting you do do even more for less.
This is helpful so thanks for posting and keeping track. Can you give context though guys? Where these firms running fat before? For god sakes we’re hiring at MocoSpace and keep up with it. Maybe its east v west coast but I’d like to understand what the starting point was for these companies.
Companies that layoff people should be severely penalized. If a company decides to open its business, it should have the capital to keep their employees employed, otherwise the company shouldn’t have the right to open the business. Do it like the Europeans, make sure the company have a lot of money in the bank before they can start a business, that way there won’t be any layoffs. If there are layoffs, the company should also go down too.
There are so many greedy companies in America that layoff people even when they are profitable and have a lot of cash in the bank. These greedy companies don’t care about their employees. The CEO write a letter telling how they are this and that but when you look in their bank account, you see a lot of money.
Why do companies allow to layoff employees when they have a lot of money in the bank????
Obama needs to fix this problem. Companies shouldn’t layoff employees when they are profitable or have a lot of money in the bank.
I’m afraid the price you pay for a shot at the American Dream is also to be tossed on the scrapheap. That’s what capitalism is, and that’s what being American is all about. You can’t have the highs without risking the lows, and when it wants to, America can REALLY deliver on the lows. Anyone younger than 35 here? This’ll be your first time. Let’s say it’s gonna be a learning experience. But what doesn’t kill you will make you stronger.
david, if you were one of my employees, i would lay you off immediately. what an idiotic comment. i’ve been in business for eight years and i don’t have millions of dollars saved because i actually pay my employees a decent wage and provide health/dental insurance. keeping a business running is extremely expensive. we currently have 25 employees and if we don’t make sales quotas in the next few months we are going to cut 20-30% of our staff. should i just give up at that point and let everyone go?
It’s reasonable that you should close the company and provide the remaining cash in the company everyone in the company. Otherwise, you are held liable to the number of employees you lay off. Because laying people off is a crime. The reason why it is a crime is because people need money to buy food, pay for rent, etc. If you’re an employer, you need to know that before you get into business and hire people. That’s how the European does it. We need to adopt this policy. It’s better for society.
Tim, if you haven’t planned ahead for at least 2 years, that makes you a terrible CEO. It’s not healthy for a business to live on a day to day basis. That’s what a budget’s for. Go back to school and learn the basic knowledge of running a business before evidently putting other people’s lives in jeopardy.
Tim is another proof that we’re not only facing a financial crisis but also an ECONOMIC crisis. And it’ll be far worst, because it’s within our culture to live on credit.
If you make laying off people hard, then you create a bit disincentive to hire people in the first place. That tends to lead to Euro-style unemployment rates.
Mike, you obviously don’t know what you’re talking about. UK is 2.9% and Sweden is 5.6%. Except France, most other countries are in the 6-7% range (http://snurl.com/4gp57). And a good counter-example is Poland (15%) with yet what you can consider the most similar employment laws to USA’s.
What you need to understand is that the % means nothing. The low unemployment rate in USA is fake because you certainly have more people working in US than in France or Germany, but you also have many of these so called ‘employed’ people doing shitty jobs at McDonalds or elsewhere for 8 bucks an hours, and having to cumulate 3 or more jobs to barely make a living. In Europe this doesn’t exist (yet), 99% of people have 1 job and that’s all.
Because the minimum wage is higher than in US and because your beloved freedom of hiring/firing puts the power in the hands of employers who have the leverage to lower salaries. In France, it’s tough to fire someone because the employer needs to justify it by either being in true financial trouble (licenciement économique) and must prove it with bank and balance sheets or because the employee has done something wrong or been always late etc… (licenciement pour faute grave).
Mike, I’ve lived on both sides of the Atlantic and trust me, our system is flawed on many counts because the balance of power between employer and employees is unfair, and I’m afraid this financial crisis will reveal it more than anything, in a terrible ECONOMIC crisis that your recent articles display through all these easy lay-offs from unethical CEOs.
ok, now i’m a little ticked off. steve, i’ve been in business for 8 years, have very little debt and every one of my employees gets paid on time and gets a great benefit package. my business was never funded except for the use of my partners credit cards when we started the company in his apartment 8 years ago. we take our responsibility to our staff very seriously and would never put anyone’s life in jeopardy.
by the way, the basics of business is to make money. we don’t look at quarterly or yearly reports at my business, we look at weekly productivity and receivable reports. i know how much money is going out and how much money we need to bring in on a monthly basis. if we don’t hit the numbers, i have no choice but to cut some of the staff. the funny thing is, because we work this way, no one has ever been laid off.
now go ask your mother to heat up some meatloaf for dinner, i’m sure you live in her basement.
Tim -
Great to hear that there are companies out there that didn’t decide to ‘play the game’ and are trying to do it the ‘old-fashioned way’ (as John Houseman used to say: “they *earned* it”).
All of these fluffy companies with silly names (I guess you have to be named some bullshit ridiculous thing like “MooGoo” in order to get funding) are going to be so much road-kill when this is all over. They’re dreaming their dream, but most are young bucks who don’t know that the VC absolutely doesn’t give a shit about *anything* except ROI. Money talks - *everything else* walks.
I’ve been involved in a business that started in 1999 and decided to not take VC since then. The principals in the company have survived by working day jobs, living in relatives basements, taking out personal and familial loans to keep things going (i.e. loans that we can’t “just walk away” from), and have made major sacrifices including year after year after year of 70 & 80 hrs / week. I personally had my first vacation in 8.5 years a few months back (and my business partner hasn’t had one yet).
So, we’re looking upon this downturn as a way to just be like a ‘cockroach’ (as Paul Graham says: http://www.paulgraham.com/badeconomy.html) and outlast it. Figure it will take 18-24 months (based on similar occurrences in Sweden in the early 1990’s where direct capitalization of the banks also occurred).
So, good on you!!
- Bill
P.S. This socialist crap where we protect all of the unproductive people makes me want to puke. The world that’s coming means you may have to work 60 hour weeks *just to eat*. Get used to it - the ‘unreality’ of the last 50 or 60 years in the U.S. is coming to a screeching halt.
You should consider adding a % column to put the numbers in context.
BS! You are causing a panic! Feeding into the whole damn thing
Would be interesting to include a column with an estimate of the total employees in the company, or a % of total workforce reduced.
Based on these comments, you should definitely write an entry on the people that are looking for talent. No fancy hiring boards or ongoing lists, just a post.
In your recent article, Paul Graham mentions it’s a great time to be building an early stage company with the economic downturn. That’s exactly where my company Socialfly is (6 months old), and we’re looking for talent ASAP. These layoffs are an opportunity for us, not just another depressing story about the economy.
If you’re an engineer being laid off, shoot me a line. http://www.socialflyinc.com
Nick
how does it feel to be a vulture using the financial meltdown to lower salaries?
We have recently launched StartupAgents, a new web community where startups and talent meet. Come check us out at: http://www.StartupAgents.com.
Lee
Oh, good fuckin idea in this economy. dumb ass.
The the cool breeze of reality sweeps through these questionable, over funded me-too web 2.0 startups.
While most are firing, some are hiring…
I think these posts will miss the real impact on people, which is the rapid deceleration of hiring. A huge number of hires simply won’t be made in 2009, and I suspect that will have a larger impact on people and companies, and impact obviously far far more companies, than the layoffs themselves.
Layoff is a corporate version of “On Diet”. If you eat too much, you blow up. There are many unsustainable “me-too” 2.0 startups. Supply >> Demand. The marketplace cannot hold that many duplicates.
Let’s get real for a second. Daniel Lynons recently penned an article for Newsweek entitled “Down in the Valley: Cloudy Days in Silicon Valley” (http://www.newsweek.com/id/163443).
It was a great article and spot on. I agree that this down economy will not be the cause of the downfall of what Daniel so eloquently phrased as “web two-dot-over”. I think this second popping of the internet bubble was due to occur anyways; this economy is simply accelerant poured on a fire that was already burning. Just like the internet bubble before, many flocked yet again to get rich quick schemes under the marketing label of Web 2.0 and social networking. Like the internet bubble it had the same premise: it’s all about eyeballs and advertising $; damned the torpedoes and spend like crazy to get eyeballs and figure out how to actually make money later (i.e. after it is sold to somebody else and we’ve cashed out).
Solid companies are based on solid business plans and fundamentals. They are based on taking risks, but doing so responsibly and with some fiscal conservatism. For some unknown reason many this industry like to flock like lemmings to the next hot thing, regardless if the business model makes sense or not; if it sounds hot it has to be good. I see no difference between what Daniel articulates in his article about many in the software industry and the financial institutions that chased the subprime mortgage market—at some point the lure and lust for easy money blurred any judgment and it was doomed to collapse at some point in time.
Well, actually, I do see a difference. In software we had a spanking less than 8 years ago starting on March 10, 2000. We knew better yet many chose to try a failed formula again.
Yes it is true. Unfortunately for the software industry this is the second verse of the same really bad song…the looming economy just stepped up the tempo such that it’ll play out quicker and louder for some… Will the rest of us in software that were not so ‘out there’ have a hard time ahead? Yes. It’ll be a rough and bumpy road, but those who make it will be those that had solid fundamentals in the first place. They will be the ones that will not only survive the times that may lay ahead, but will thrive.
In the future, let’s not try to learn this lesson a third time though. Okay?
I agree with Jason Lemkin. We are on a downward curve whose real effects have not materialized. The rapid deceleration of hiring will produce a greater impact because those who are out of work will start to collapse because their savings will dry up. The layoffs are at the top of the downward curve. The real depression comes from those who have been dropped out of the job market who can’t get back in. Not to mention all of the new candidates from high school and college who can’t find work.
Erick - JS-Kit doubled it’s team in the last couple of weeks. From 9 to 18
I’ve enjoyed Techcrunch these past few years, but the entries have had an increasingly spiteful and sinister tone to them of late. I can only imagine you guys lost a considerable amount of money in this downturn or you’re worried that without a vibrant startup community your site will be irrelevant.
I agree with other posters that this particular entry is sensationalist and is a disservice to the startup community. For a site that has made its living on that community I find it pretty ugly to see an entry like this. You may not think you are gloating, but it most definitely comes across that way.
I need to find another tech community site to follow.
Yes please do. Over the years Pete the quality of your anonymous comments has declined rapidly and they have taken on a morbidity that’s starting to bum the rest of us out.
And yours?
So does anyone know wether the bulk of these newly unemployed people are engineers or diz dev and sales folks. If they are the engineers they might get hired sooner, I myself am looking for developers right now.
I think talents are also watching this list to keep themselves away from bad employers. I guess Google did not lay off during last recession.
When you have a layoff, something fishy inside anyway
if you want to know who is hiring in the MCA industry check out merchantcashadvancesblog.blogspot.com
We have setup this forum to discuss pink slip’s, layoffs and other relevant issues, I request all to take a look. participation is appreciated. Click on my name or type in http://www.pinkslipping.com to visit the forum.
Thanks in advance.
And yeah any suggestions on relevant topics are also welcome. Thank you guys.
i heard greendimes a stupid startup lay off its engineers, and outsource work. only 1 developer is left with them, die GD
My Company has not had any release for last two months. I work for a we- 2.0 Startup. I know this is scary. They are not disclosing anything. I think you will see their name here.