Good morning! Some companies are in their second round of layoffs. Can we expect rounds three and four soon?
One round of layoffs is not enough
HR leaders tend to agree that when companies have bad news to share, like layoffs, they should tell as much as possible at once.
But the cuts did not stop. And now some companies are in their second round.
- Netflix laid off another 300 workers in late June, after laying off Tudum writers in April and another 150 employees in May.
- Mural told me last week that it had laid off more employees, but did not confirm how many. At least nine employees were laid off in early May.
- Hopin cut 12% of its staff in February, and another 29% earlier this month.
- Gemini cut 10% of its staff in June, had a second round last week and more layoffs may be on the horizon.
Better to stick with one round of layoffs. But ECI Group’s Jay McDonald told me that these companies likely underestimated how many workers they would have to cut or jump the gun in their initial announcement.
- “My bias is to try to minimize the pain and angst of these situations, and there are certainly times when companies feel like they’ve done that,” he told me. “And after a few months they realized that business wasn’t as good as they expected.”
- The mural, for example, is still figuring out how big it was during the pandemic. “This year as market conditions changed again, we had to adapt again,” a spokesperson told me.
— Sarah Roach
Investing in a downturn
As a former dot-com-era founder, SignalFire CEO Chris Farmer sensed the collapse was coming. So he prepared for it by investing early in startups and focusing on his firm’s work helping portfolio companies develop and execute strategy.
The farmer started preparing at least three years ago for a potential fall. He started trading “valuation risk for execution and technology risks,” he told me.
- First, he moved the company’s series B fund into a series A fund, and its seed fund into a pre-seed fund. Now, the company is “not sitting on a bunch of stuff that we overpaid for.”
- SignalFire also looks at “macro environmental impacts” on industries. For example, the company invested in health technology when the pandemic “cut the doors” to telemedicine.
SignalFire is run like a tech company rather than a VC firm. The company has a C-suite, as well as an engineering and data science team.
- Employees have the opportunity to provide hands-on guidance to early-stage companies. The farmer called it “the ultimate sandbox.”
- And the model seems to work. SignalFire’s partners include former tech execs, including from Netflix, Stripe and Dropbox.
Hands-on mentoring can be a big draw for startups, he said. As funding rounds get smaller and smaller, startups will want to partner with funds that will “get you in the trenches.”
Read the full Q&A with Farmer here.
— Nat Rubio-Licht
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People are talking
Su Zhu and Kyle Davies finally talk about the collapse of Three Arrows Capital:
- “Say I absconded funds last time, where I actually returned more than my personal money. That’s not true.”
SentinelOne’s Tomer Weingarten says not to be “too romantic” about AI:
- “AI is the ability to have an algorithm that understands anomalies and is intelligent enough to make a decision.”
Jessica Rosenworcel wants mobile carriers to explain what geolocation data they collect:
- “Mobile Internet service providers are uniquely positioned to obtain a wealth of data about their own subscribers.”
Making moves
Google has fired software engineer Blake Lemoine, who claimed that the company’s AI bot had become sensitive.
Pacaso created a government advisory board which includes Austin mayor Steve Adler, Denver, Colorado mayor Michael Hancock, Florida Rep. Danny Perez and other former and current government leaders.
Apoorva Mehta will do it step down as executive chairman of Instacart when the company goes public.
Jay Carney is joining AirbnbAirbnb as global head of policy and communications. Carney is SVP of global corporate affairs at Amazon and was White House press secretary under Obama.
Michael Casolo is the new chief revenue officer of Upflex. He will oversee the startup’s planning, scaling and revenue reporting.
In other news
Twitter blamed Elon Musk for its fall in quarterly revenue and a net loss, saying the deal has slowed its relationship with advertisers.
Wherein: Tesla is going to a settlement conference to settle Musk’s dismissal of his 2018 “Twitter Sitter” lawsuit. The meeting will take place in October.
Elon Musk and Sergey Brin’s wife had an affair last fall, The Wall Street Journal reported. Brin and his wife filed for divorce earlier this year. The musk has denied the allegations.
California will let candidates accept crypto campaign donations, tthe Fair Political Practices Commission voted last week.
Meta is investing $150 million in its Oversight Board Trust. Meta previously contributed $130 million to the trust in 2019.
Tesla can let any EV use its fast chargers if the company gets the federal funding it expects. The money could be approved in October.
It would be illegal for websites in South Carolina to tell how to get an abortion if a new bill passes.
Mark Zuckerberg sold his house in San Francisco for $31 million, the highest price in the city so far this year.
The price of spam
Email spam is everywhere. But Andy Mowat, CEO of a new email tool called Gated, thinks he’s figured out how to beat it: making it expensive. An anonymous sender triggers an autoreply that prompts the spammer to donate money to the user’s chosen nonprofit. And if the spammer doesn’t pay, the email goes to a special Gated inbox. Now if someone could just invent this for all the junk mail in our physical mailboxes, too.
SPONSORED CONTENT FROM MICRON
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