To say that 2019 was a challenging year for tech startups would be more than an understatement. From regulatory issues to all the layoffs in 2019, some startups fared much better than others.
The troubles have continued into Q1 2020, with hundreds of employee layoffs spread among several startups. Lyft, Mozilla, and Quora all made headlines for laying off significant numbers of employees. Smaller startups have experienced similar challenges. Atrium, Boosted, and Particle, for example, made the hard choice to conduct layoffs in the first quarter of 2020 as well.
These startups conducted layoffs in 2019:
- E-scooter early adopter Bird laid off around 24 employees, mostly those that had come to Bird from Scoot, which Bird acquired in early 2019. Bird said it would move other Scoot members to a branch location outside their San Francisco headquarters as part of an ongoing restructuring effort.
- Ride-hailing leader Lyft laid off at least 1,000 workers in 2019 and continued cutting jobs into Q1 2020. Lyft cited a need to restructure its workforce to improve results across the board. Most of the job layoffs affected marketing and enterprise sales employees.
- Fair, a startup working on a flexible car ownership model, has raised at least $500 million toward the effort. However, the company laid off 40 percent of its workers in 2019. Fair is still working through a restructuring.
- WeWork may work, but at least 2,400 people no longer work for WeWork. The once-promising shared workspace startup shared that the job cuts were part of its efforts to curb costs and prepare for the future.
- Rideshare pioneer Uber laid off 435 employees from its product and engineering teams in 2019. Uber said it hoped the staff layoffs would help to “reset and improve how we work day to day.”
- Online education startup Udacity, once valued at over $1 billion, laid off around 20 percent of its workforce in 2019. Co-founder Sebastian Thrun said the company needed to restructure operations to bring costs in line with revenue without curbing growth.
- Managed-cloud services provider Rackspace conducted three waves of layoffs between 2017 and 2019. A total of 500 employees were let go over the course of these three years. The company layoffs were part of Rackspace’s strategy to “constantly rebalance” their workforce, so we may see additional layoffs in 2020.
- China-based ride-hailing startup Didi Chuxing laid off around 2,000 workers in 2019, about 15 percent of its staff. To explain the major layoffs, the company cited the fallout from two widely-reported Didi Chuxing users and increased regulatory scrutiny as contributing to the cuts.
- Houzz, a home improvement platform that connects homeowners with local contractors, is putting up record profit numbers. Still, the company decided to restructure its international marketplace workforce, mostly focusing on its U.K. and Berlin offices. Houzz laid off 180 employees in late 2019.
- Despite rapid revenue growth, BuzzFeed experienced layoffs in 2019. The company laid off a full 15 percent of its overall workforce. As CEO Jonah Peretti explained, “unfortunately, revenue growth by itself isn’t enough to be successful in the long run.”
- Tesla CEO Elon Musk announced in 2019 that it was laying off around 7 percent of its full-time workforce, which accounts for around 3,000 people. At the time, the announcement came as a shock to investors and Tesla fans. Tesla explained the layoffs as a way to streamline the company and prepare for expected troubles ahead.
- SpaceX, Elon Musk’s second groundbreaking tech startup, laid off around 10 percent of its staff across all departments. In total, the company let 600 people go. SpaceX attributed the layoffs to what it described as “extraordinarily difficult challenges ahead” to achieve its lofty goals of creating interplanetary spacecraft and a “global space-based Internet.”