It’s already been another brutal week for startups.
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Opendoor, Carta and VSCO all slashed their staffs this week.
Opendoor’s layoffs were the largest by percentage and the number of people let go. The home-buying startup cut 35 percent of its staff, the company confirmed to Crunchbase News. The layoffs, totaling about 600 people, were first reported by The Information.
With real estate being hit hard by the COVID-19 pandemic, Opendoor’s struggles make sense. The company paused home purchases last month, which cut the selling fees that are Opendoor’s primary source of revenue, according to The Information.
“COVID-19 has had an unforeseen impact on public health, the U.S. economy, and housing. Given the shelter-in-place guidelines, we’ve seen declines in the number of people buying, selling and moving during this time of uncertainty,” CEO Eric Wu said in a statement to Crunchbase News. “In response, we’ve announced to the company that we’ve made the difficult decision to reduce our team by 35 percent. This was necessary to ensure that we can continue to deliver on our mission and build the experience consumers deserve.”
Carta let go of 161 people, according to a memo sent by CEO Henry Ward and published on Medium. The layoffs, which were first reported by Bloomberg, account for about 16 percent of the company’s workforce.
Carta, which is backed by investors including Andreessen Horowitz and Menlo Ventures, helps companies and employees manage equity. And when startups struggle, it impacts Carta.
“We exist only because our customers exist and allow us to serve them,” Ward wrote in the memo. “And when our customers suffer we suffer too.”
VSCO, the popular photo sharing app based in Oakland, California, let go of 45 employees, according to a LinkedIn post by CEO Joel Flory.
“2020 was staged to be a year where we would continue to forward invest into our business,” Flory wrote. “Overnight our environment changed. We realized that we would need to shift towards running a self-sustaining business.”
These layoffs follow weeks of others at high-valued, big-name startups. Toast, Away and Branch were among the startups reporting layoffs last week, and other high-profile companies like Bird, ZipRecruiter and Compass have slashed staff.
Illustration: Dom Guzman
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