COVID-19 Venture

Unicorn Companies Account For High Number Of Layoffs

Thirty-six private unicorn companies have laid off staff since the coronavirus outbreak, accounting for 8,416 jobs lost according to Layoffs.fyi. This represents a staggering 46 percent of all reported layoffs for private companies out of a total of 18,453.

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We matched the Crunchbase unicorn list of 585 current private unicorns with the Layoffs.fyi list to measure how many private startup unicorns are laying off employees. This is a small proportion, namely 6 percent of private unicorn companies so far that have announced layoffs. Private unicorn companies account for 14 percent of the 252 private startups named in the Layoffs.fyi list.

Add to this the five public unicorn companies that have announced layoffs–companies that had a private round valuing them at or above $1 billion–which bring the total to 12,241 of 25,873  jobs or 47 percent of laid off employees are from private and public unicorn companies.

Roger Lee, co-founder of Human Interest, created the list to give laid-off employees exposure to companies still hiring. Human Interest, which helps small businesses set up 401K plans for employees, recently closed a $40 million Series C in March of this year as the U.S. was preparing for social distancing.

Lee spoke with Mary Ann Azevedo from Crunchbase News earlier this month, acknowledging that this list is based on confirmed layoffs. The counts are probably a lot higher. Lee also acknowledged that unicorn companies are more likely to be covered by the media should they have layoffs.

The industries most impacted for this cohort are in food, real estate, transportation and travel. However, job losses are not limited to just a few sectors. Other industries represented are in fitness, aerospace, recruiting, logistics, finance, marketplaces, construction, data, marketing and more.

The average job loss across private unicorn companies is 26 percent of employees at a company with a median of 22 percent. The companies with the highest percentage of layoffs include: OneWeb, which filed for bankruptcy with 85 percent of its workforce laid off; Zume, which has had ongoing business model issues from 2018 (67 percent); Toast (50 percent); ezCater (44 percent); ZipRecruiter (39 percent); and Opendoor (35 percent).

The highest proportion of private unicorn companies with layoffs –36 percent–hail from the San Francisco Bay area. However job losses for many of these companies are not limited to the Bay Area as unicorn companies have expanded with offices in multiple markets.

The private unicorn with the highest count of job losses is Boston-based Toast, the restaurant point-of-sale management platform, with 1,300 job losses. This represents 50 percent of its workforce. The next highest count is San Francisco-based Opendoor, a real estate company that offers online home selling, which has let 600 employees go, 35 percent of its workforce. Gympass a fitness discovery platform in Sao Paulo, Brazil, with multiple offices around the world has cut 467 staff, or 33 percent of its workforce.

Thirty of the 36 private unicorn companies have raised funding since the beginning of 2019. Seven of these startups have raised funding since January 2020, collectively raising over $1 billion. They include TripActions, Toast, ClassPass, OneTrust, Loft, Bird and Turo. Another 23 raised funding in 2019 totaling more than $6 billion.

Public unicorn companies with layoffs include daily deal site Groupon with the highest count of layoffs on this list with 2,800 employees let go (44 percent of its workforce). Other public unicorns include events platform Eventbrite with 500 layoffs (45 percent), consignment clothing The RealReal with 235 layoffs (10 percent), action video camera GoPro with 200 layoffs (20 percent), and business intelligence platform Domo with 90 employees let go (10 percent).

Pro tip: Crunchbase Pro users can save The Crunchbase Unicorn List to their account to track private unicorn companies.

Illustration: Li-Anne Dias.

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