COVID-19 wreaked havoc on many startups earlier this year. Over the course of the summer, though, crowdsourced data suggested that layoffs at startups across the country had leveled off. If true, that’s a very good sign—but which startups have taken the biggest hits in terms of staff reductions?
Layoffs.fyi has been tracking startup layoffs since the beginning of the pandemic, relying on the aforementioned crowdsourced data. Although crowds aren’t always the most scientific way to determine a trend, the data collected by the site does correlate with other news sources and what the companies themselves have announced. With that in mind, here are the 25 startups that have endured the most layoffs:
Startups that focus on transportation and activities that demand face-to-face contact (such as dining and tourism) seem to have taken the biggest layoff hits. For example, Uber has eliminated roughly 3,700 jobs since the pandemic began; Airbnb has cut 1,900 workers. It’s worth noting that these companies, despite embracing the term “startup,” are often quite large and (in some cases) publicly traded; nonetheless, thousands of workers still represent a significant percentage of their overall workforces.
For smaller startups, losing even a dozen workers may represent a much higher percentage of the overall company. And in the case of startups such as Magic Leap, which poured millions into next-generation AR eyewear but reportedly suffered from internal issues, COVID-19 may have accelerated a decline, rather than being solely responsible for it.
If you don’t recognize some of the firms on this list, it’s because their marketing efforts are focused on audiences in countries other than the U.S. Nonetheless, it’s worth listing these startups because a.) it shows the international impact of the pandemic, and b.) today’s foreign startup is tomorrow’s domestic hit (Hi, TikTok! How’s your week going?).
As we head into the winter months, and companies inevitably begin to think about 2021 from an operational standpoint, the big question is whether layoffs will remain relatively flat. It certainly seems as if many startups have adapted their operations to the current paradigm; for example, the rideshare firms have spent the past few months actively exploring food delivery and other options. Some startups, sadly, may look at the potential environment over the next several quarters and decide that shutting down (while returning any remaining money to investors) may prove the best option.
As Dice’s ongoing COVID-19 Sentiment Survey has made clear, technologists feel like they have lots of options, despite the ongoing pandemic. In every iteration of the survey, roughly a third of technologists who are currently employed on a full-time basis plan on looking for a new job sometime in the next two weeks, suggesting that many feel they can get a better deal out there. That’s actually good news for startups with an exciting business plan that have the money to spend on talent—and potential opportunity for those technologists who perhaps want to try something new.
