Thumbtack, an online marketplace that connects people to local professionals for their projects, confirmed Monday that it has laid off 250 employees as a result of the economic fallout caused by the coronavirus pandemic.
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In a blog post, CEO Marco Zappacosta said that Thumbtack’s revenue has declined “dramatically” in recent weeks. He said the 12-year-old company started some deep cost-cutting two weeks ago, including dramatically reducing marketing spend, implementing a hiring freeze and cutting internal programs for employees.
Even with those cuts, the numbers didn’t add up, wrote Zappacosta. The executive team next looked at its own salaries. Starting today, Zappacosta said he will take no salary while the rest of the executive team has cut their salaries by 25 percent. Further, Thumbtack has asked team members companywide–those who are mid-senior levels and above–to reduce their pay.
“After scrutinizing every expense in the business and cutting everything we could, the numbers still didn’t add up,” Zappacosta wrote. “So in such an unprecedented time, and with no other way forward, we made the incredibly difficult decision to part ways with 250 of our team members today.”
The company said it is providing each affected person with a severance package that includes both cash and equity components. Zappacosta said the company is also doing what it can to help them find new jobs.
He wrote: “In my time running this company, there has been no worse moment than this one–telling people I value and respect, who have contributed so much–that they no longer have a place at Thumbtack because of events completely outside of anyone’s control.”
In the blog post, Zappacosta said last summer Thumbtack raised $150 million in a Series F round led by Sequoia Capital at a pre-money valuation of $1.6 billion. According to Crunchbase data, Thumbtack has raised $423.2 million in known venture funding. Other backers include Baillie Gifford and Tiger Global Management, among others.
Of course, Thumbtack isn’t the only company being negatively impacted by the pandemic. Last week, we reported on TripActions, Sonder and Zeus Living all laying off employees. We also covered how Austin-based startups Outbound Engine, The Guild and Yonder had to let people go, while Irvine, Calif.-based Restaurant365 shed “a big chunk” of employees as well.
Illustration: Dom Guzman
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