As tech layoffs surge, some support emerges for those without a job

The massive surge of COVID-19-related layoffs has put tech in a unique position. While the startup world is facing layoffs itself, it is also trying to help get people back to work.

Back at the end of 2019, the SoftBank-backed belt-tightening period led to a flurry of crowdsourced spreadsheets with employee names from companies like Oyo, WeWork, Zume and more. The spreadsheets popped up as a bet on the network effect, with the ultimate goal of hoping the sheets land in the hands of a recruiter looking to hire one of hundreds laid off. Now, as COVID-19 cripples the economy, layoffs have surged dramatically past that one period.

On one end, we’ve reported on numbers of tech companies cutting staff, from Oyo, to ZipRecruiter, to TripActions. But on the other, brighter end, we’ve also seen the rise of platforms to connect those laid off and pledges from employers to not fire any employees during this trying time.

In a world where people are laid off on Zoom, tech’s efforts to give community, and a course of action, to those laid off is undeniably important.

The current climate of the pandemic, and the massive unemployment that has resulted, means that a spreadsheet with a long list of employee names and unverified contact information doesn’t cut it.

Shannon Anderson, the director of talent at Madrona Venture Group in Seattle, saw her firm’s portfolio companies struggling with layoffs and the changing economy. Two of the  portfolio companies, Textio and Rover, laid off staff, along with a number of other companies.

“We wanted to anticipate a reduction in force across the ecosystem,” said Anderson. “It’s a global problem.”

So, to help boost the network of those laid off, Anderson reached out to a number of HR leaders, including Chris Brownridge, the founder of Silver Lining, a job platform for those who have been laid off. He started Silver Lining after he shut down his startup last summer and had to lay off his staff of 20.

“I felt the pain [of layoffs] from the employer side, and it is painful for the employer, especially when you care about [your workers],” he said back in January. “I don’t want to keep seeing spreadsheets thrown around; I think that is not the right answer. We need a standardized way to deal with it, with a community behind it.”

Silver Lining is a platform that lets candidates submit profiles for recruiters from top companies to review. Job seekers on the site range from architects, UX designers, engineers, community managers and more.

Then COVID-19 spread across the world, forcing people to stay home and spend less. The economy’s downturn unevenly impacted companies around the world: where layoffs exist for the travel sector, usage surges exist for the remote work companies. But as a whole, the labor force is struggling, with 6.6 million Americans filing for unemployment just last week alone.

Madrona said it is donating a portion of its budget to help Silver Lining offer more services to those laid off. The firm declined to share the total amount of the donation.

Silver Lining will also now offer coaching, resume writing and emotional support to folks on the platform, Brownridge says. Thanks to donations from Madrona, Skytap, Bandwidth, Voodle, Female Founders Alliance and more, the site is free to use.

The uptick in layoffs has led Boston-based Drafted, a referral startup, to launch a product called the Layoff Network to help those who have been laid off. The startup previously was sending out a newsletter, Layoff List, of weekly list of layoffs with spreadsheets hyperlinked. During the SoftBank layoffs, Olivia Clark, the creator of the newsletter, noticed a surge in traffic — more than 1,000 recruiters subscribed.

Now she says traffic is “up 2,000%” and, in just two weeks, Drafted’s engineering team has productized that newsletter into a job search network.

The Layoff Network connects with recruiters people who have been recommended by their colleagues and “endorsed” for their skills. If you’re laid off, you can sign up and create a profile and ask a previous employer or colleague to recommend you. Clark says this is similar to LinkedIn’s “endorse” feature to make sure the people are credible.

Once the person has been endorsed, they will be added to a talent feed. That is where recruiters can search for nominees, job titles, companies or locations. Unlike a spreadsheet, this is clearly easier to navigate and adds another layer of human touch.

Clark says that the platform will be free for individuals who have been laid off, and who are recruiting or hiring. Drafted has a paid enterprise level that is for organizations that are conducting mass layoffs and want to provide support for former employees.

 

The grassroots efforts are vast and diverse. Here’s a list that posts companies that are actively hiring. Here’s a list for Canadian tech workers, and one for Colorado’s tech scene. And here’s a live tracker of startups that have issued layoffs, started by the team over at Human Interest, a startup that has nothing to do with layoffs.

Megan Murphy, who created Chicago Superstars for those laid off from the Chicago tech scene, has not received donations or support yet. As the number of unemployed people increases, Murphy says she’s noticing a lack of clarity on which companies are hiring, and which job postings are still active. If a company was hiring for a position in January, it might not be anymore (to help keep costs down).

“I can’t waste time crafting cover letters and custom resumes for jobs that won’t actually move forward,” she said. “There are tons of crowdsourced tools trying to flag who’s actually hiring still, while others are trying to flag who’s instituted a hiring freeze or laid people off, and in the meantime, company career pages aren’t up to date. We need one source of truth — and right now nobody’s really set up to do that.”

For now, Murphy says she’s getting creative in her own search, and asking for others to do the same. “Virtual communities and experiences are about to be more important than ever.” She notes guerrilla Slack channels and Reddit as an example of organic communication.

As for how she’s able to keep up with the demand of people needing help for their next job? Murphy, who is looking for a job herself after getting laid off, says she has fewer interviews from potential employers, so she’s been able to help those reaching out.

The work done by these entrepreneurs scratches at the same hope that lies within the hundreds of lines of contact information within a crowdsourced layoff spreadsheet: a need for a community in a trying time. And these days, more than most, remind us of the power of having a group of people together in the first place.

Keeping the score on Zoom

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

How are you holding up? Are you keeping up? And most importantly, are you hydrating yourself? There’s so much news lately that we’re all falling a bit behind, but, hey, that’s what Equity is for. So, Natasha, Danny, and Alex got together to go over a number of the biggest stories in the worlds of private companies.

A warning before we get into the list, however. We’re going to be covering layoffs for a while. Don’t read more into that beyond a note to this unfortunate situation. We try to talk about the most important news, not what brings delight or joy to our hearts (because if that was the case, we would be all over mega-rounds). That in mind, here’s this week’s rundown:

And that’s what we got through. The Equity crew is doing its best to bring you the news, but make sure to let us know what you think. We’re at [email protected] every day of the week. And we’re thankful for it. Take care of yourselves.

Equity drops every Monday at 7:00 AM PT and Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

Modsy confirms layoffs, 10 months after announcing its $37M Series C

Modsy, an e-commerce company that creates 3D renderings of customized rooms, has confirmed to TechCrunch that it laid off a number of staff. In addition, several of its executives, including CEO Shanna Tellerman, will take a 25% pay cut. TechCrunch first heard about the layoffs from a source. The company’s confirmation of cuts comes amid a wave of layoffs in the technology and startup communities

In a statement from the CEO Shanna Tellerman to TechCrunch, Modsy said that “[i]n an effort to maintain a sustainable business during these unprecedented circumstances, we made a round of necessary layoffs and ended a number of designer contracts this week.” The company reaffirmed belief in its “long-term growth plans” in the same statement.

Modsy did not immediately respond when asked about how many individuals were impacted by this layoff. Update: The company declined to share the number of employees impacted.

The startup is backed by investors including TCV, Comcast Ventures, Norwest Venture Partners, GV, BBG Ventures, according to Crunchbase data. It has raised $70.8 million in known capital to date. 

Modsy bets on individuals looking to glam up their homes by better visualizing the new furniture they want to buy. Users can enter the measurements of their living room and add budget and style preferences, and Modsy will help them with custom designs and finding furniture that fits — literally.

The layoffs show that customer appetite might be changing. Last week, home improvement platform Houzz confirmed that it has scratched plans to create in-house furniture for sale. It also laid off 10 people across three locations: the U.K., Germany and China. Houzz is comparatively larger than Modsy, with a roughly $4 billion valuation. But scratching its in-house plan that would have likely brought in more capital is yet another data point in how e-commerce companies are struggling right now to get consumers to spend on items other than beans, booze and bread starters.

In retrospect there were rumblings that the company was cutting staff. A number of recent reviews from its Glassdoor page note layoffs, with one review from March 25, 2020 calling them “mass” in nature; our original source on the company’s recent cuts also noted their breadth.

You can find other social media posts concerning the company’s layoffs, some noting more than one wave. TechCrunch has not confirmed if the recent layoffs are the first of two, or merely the first set of cuts. 

A little over 10 months ago the company was in a very different mood. Back in May of 2019, flush with new capital, Modsy’s CEO said that the “home design space, the inspiration category is thriving.” 

Pinterest just IPO’d, and it seems as if every TV channel is entering the home design category,” she said. “Meanwhile, e-commerce sites have barely changed since the introduction of the Internet.”

Rebecca Minkoff has some advice for e-commerce companies right now

When Rebecca Minkoff first moved to New York City, the then-18-year-old was making $4.75 an hour.

“I just kept working for this designer and someone was telling me what to do every day. I just didn’t like that. And I thought if I’m going to work as hard, it’s going to be for myself and I want to call my own shots,” she said. “I didn’t want to be told what to do, frankly.”

Self-employment for Minkoff turned out just fine; in 2001, she redesigned the iconic “I Love New York” shirt and it appeared on The Tonight Show. After a shout-out from Jay Leno, Minkoff spent the next eight months making T-shirts on the floor of her apartment and quit her job to start designing full time.

We caught up with Minkoff to learn more about how she grew her brand into a global fashion company with the help of her brother, her problem with the unicorn mentality and why she thinks the “invisible barrier” is the future of retail tech.

This interview was edited for brevity and clarity.

TechCrunch: What gave you the energy and drive to become an entrepreneur?

Rebecca Minkoff: Long story. My mom would sell these cast covers, like decorative covers for people with broken arms at the flea market. And I was like, I am going to have a booth here. So I made all these tie-dye shirts and no one bought anything but it was just this idea of like, I can make something I can sell. My mom always taught that. When I wanted a dress, she taught me how to sew a dress instead of buying the dress. And so, I just got this bug for creating things out of nothing.

The constant thread was, “I’m not going to pay for this. You’re going to learn how to do it.”

Attorney Sophie Alcorn answers readers’ immigration questions

We had a great time hosting noted immigration attorney Sophie Alcorn on a live conference call with Extra Crunch members earlier this week.

Sophie writes our “Dear Sophie” column, where she answers questions about immigration status, particularly for founders and others in the tech ecosystem who want to work in the United States.

In our conference call, we talked about the changes happening to H-1B visas, what COVID-19 is doing to the immigration system and some of the top concerns of founders in these perilous times. Below the jump, you’ll find an edited transcript, or you can listen to the call in its entirety.

As with all legal advice, always speak with your own retained attorney about specific details regarding your own cases as illustrative examples may or may not apply to your own unique situation.

Plastiq raises $75M to help small businesses use credit cards more

When Eliot Buchanan tried to use his credit card to pay his Harvard tuition bill, the payment was rejected because the university said it doesn’t accept credit. Realizing the same problem exists for thousands of different transactions like board, rent and vendor payments, he launched Plastiq. Plastiq helps people use credit cards to pay, or get paid, for anything

Plastiq today announced that it has raised $75 million in venture capital in a Series D round led by B Capital Group. Kleiner Perkins, Khosla Ventures, Accomplice and Top Tier Capital Partners also participated in the round. The round brings the company’s total known venture capital raised to more than $140 million.

To use Plastiq, users enter their credit card information on Plastiq’s platform. In return, Plastiq will charge you a 2.5% fee and get your bills paid. While Plastiq was started with consumers in mind, SMBs have now accounted for 90% of the revenue, according to Buchanan. The new financing round will invest in building out features to give SMBs faster services around payments and processing. 

Plastiq provides a way for SMBs and consumers to pay their bills and make sure they have reliable cash flow. For example, restaurants sometimes have a drop in revenue due to seasonality or, as we’re experiencing now with COVID-19, pandemic lockdowns. Or tourism companies for cities that are struggling to attract visitors. Those companies still need cash flow, and using Plastiq’s service, they can use credit cards to pay suppliers even in an off season. 

There is no shortage of competition from other companies also trying to solve pain points in small-business cash flow. According to Buchanan, Plastiq’s biggest competitors are traditional lenders, as well as companies like Kabbage and Fundbox. Similar claims could be made about Brex, which offers a credit card for startups to access capital faster. 

Kabbage provides funding to SMBs through automated business loans. The SoftBank-backed company landed $200 million in a revolving credit line back in July, fresh off of landing strong partnerships with banks and giants like Alibaba to access more customers. Kabbage loans out roughly $2-3 billion to SMBs every year. 

Plastiq, according to its release, is also on track to make more than $2 billion in transactions. But unlike Kabagge, Plastiq doesn’t issue loans or credit, it just unlocks a payment opportunity.

“SMBs don’t need to be burdened with additional debt or additional loans,” Buchanan said. “So rather than trying to reinvent the wheel, let’s use a behavior they have already earned.” 

Buchanan would not disclose Plastiq’s current valuation or revenue, but he did say that it’s not too far away from $100 million in revenue run rate. The company’s revenue has grown 150% from 2018 to 2019. 

The company also noted that it has surpassed “well over 1 million users,” up 150% in unique new users from 2018 to 2019.

In terms of profitability, Buchanan said that “we could be profitable if we wanted to be,” noting that Plastiq’s revenue and margins could lead them toward profitability if they wanted to focus less on growth. But he added they don’t plan to “slow down” the growth engine any time soon — especially in the wake of the COVID-19 pandemic.

Because the Series D round closed at the end of 2019, Buchanan said the pandemic did not impact the deal. However, the company had planned to time the announcement with tax season. Now, as small businesses struggle to secure capital and stay afloat due to lockdowns across the country, Plastiq’s new raise feels more fitting. 

“Our customers are more thankful for solutions like ours as traditional sources of lending are drying up and not as easy to access” Buchanan said. “Hopefully, we can measure how many businesses make it through this because of us.” 

The 140-person company is currently hiring across product and engineering roles.

Instacart will bring on 300,000 new full-time shoppers due to coronavirus

San Francisco-based Instacart today announced it will bring on 300,000 shoppers for its grocery delivery platform over the next three months. The move is meant to manage an uptick in demand due to the novel coronavirus pandemic. 

The platform lets users shop from well-known grocery stores like Costco, Safeway, Krogers and more from home. Once an order is submitted, a designated grocery shopper will pick up the items and deliver it home. 

Once relying on the lazy shoppers among us, Instacart is now seeing an uptick in volume of orders as delivery becomes a safer option amid the novel coronavirus disease. All of a sudden, social distancing means less trips to the grocery stores, which means more reliance on delivery platforms like Instacart. 

In a release, Instacart noted that it operates in more than 5,500 cities and will bring on shoppers from across the country. In California, Instacart will bring on 54,000 new shoppers. In New York, the company will bring on 27,000 new shoppers. Other states like Illinois, Ohio, Georgia, and New Jersey will also get thousands of new shoppers. 

The new shoppers will be offered sick pay, and it will distribute cleaning supplies and hand sanitizer to them as well.

Grocery stores, for now, remain open across the country, even in states under lockdown. Grocers are deemed an essential business, and Instacart is helping goods get in the hands of people that can’t take the chance to leave their home.

Californians can now order alcoholic beverages to go

In a memo yesterday detailing relief efforts for small businesses during the COVID-19 pandemic, the California Department of Alcoholic Beverage Control has temporarily allowed retailers to sell alcoholic beverages for takeout. This lifts a ban previously imposed on restaurants and bars to only sell alcohol in-house.

Bars can sell manufactured pre-packaged containers of liquid, such as pre-mixed drinks, cocktails, beer or wine, to customers to go when the beverage is purchased with a meal. If you sell an alcoholic beverage to go, you have to pack it in a container with a lid or cap without a sipping hole or opening for a straw.

While the notice temporarily lifted a ban on the sale of alcoholic beverages, it did not impact the open carry laws imposed by the state. If you pick up a beverage and want to drive home to enjoy it at a socially safe distance, you have to put the drink in the trunk. Not the utility compartment or glove compartment. You also can’t consume alcohol in public or in any area where open containers are prohibited, the memo notes.

Other relief efforts include allowing retailers to sell alcohol through drive-through windows or slide-out trays. This is in effect until further notice.

Here’s how to help restaurants while socially distancing yourself

The restaurant industry might look a lot different once we come out of this pandemic. As social distancing and lockdowns ripple across the nation in an attempt to fight COVID-19, some restaurants won’t be able to handle the lack of income and might tip into bankruptcy. Some might never reopen again. Earlier today, New York Governor Andrew Cuomo implemented a 90-day moratorium, or temporary prohibition, on evictions for residents and businesses such as restaurants.

Ayr Muir, the owner of Clover, a chain of veggie-friendly fast food joints, filed for unemployment recently. Clover is on hiatus but is working to connect its farmers and suppliers directly to customers to help them stay afloat. 

“It’s easy to say ‘there’s unemployment benefits’ or ‘there are SBA loans,’ but when you get down to the details it’s a lot more nuanced,” Muir said. “I have staff who are scared to apply for government benefits, some fear it will impact their legal status, like if you’re here on a student visa. And the process can be really confusing.”

He says he filled out his own unemployment application the other day but isn’t sure he did it correctly. “This just adds to the feeling of uncertainty and stress.”

Entrepreneurs from all over the country are trying to unlock different ways to help vulnerable local restaurants buy themselves some time. It’s often in the form of purchasing gift cards from your favorite neighborhood spots.

The trend, much like other ways big tech is helping others out during this pandemic through free promos or access to services, can be looked at in two ways. First, it’s a way to make this transition less stressful. Second, and perhaps more cynically thanks to capitalism, offering free services is a way to pipeline eventual customers down the road. 

Let’s focus on the former, because it is Friday, I miss writing about good news and these efforts deserve a fist bump for being a net positive for local shops.

SaveOurFaves

Started by Kaitlyn Krieger and her husband, Mike Krieger, the co-founder of Instagram, SaveOurFaves wants to help Bay Area residents buy gift cards for nearby restaurants. You can divide by neighborhood and region, like San Francisco, East Bay, Marin or South Bay, and pick a local business.

For what it’s worth, some San Francisco restaurants have already temporarily closed, even though they could stay open and sell take out. La Taqueria, one of the city’s most famous burrito spots, is one high-profile example. 

On the site, the duo notes that restaurants have tons of fixed costs, like rent, labor, loan repayments, insurance, supplies, repairs — the list goes on. Even “successful restaurants have razor thin margins of 3-5%, and a third have struggled to pay employees at least once.”  

Help Main Street

Lunchbox, Eniac Ventures and a group of volunteers started Help Main Street so residents around the country could buy gift cards for their favorite businesses. The goal is to help local businesses recover lost revenue, and businesses range from Abettor Brewing Company in Winchester, Ky. to 45 Surfside in Nantucket, Mass. We wrote about it when it launched a couple days ago, and Eniac’s Nihal Mehta said there will be a Patreon-of-sorts option coming soon. It has roughly 14,000 listings on the website so far. 

Open Table

Open Table, a company that lets you book reservations at restaurants, has a feature that lets users buy gift cards from restaurants. 

Rally for Restaurants

Boston-based unicorn Toast created Rally for Restaurants to help people buy gift cards for businesses and challenge their friends to do the same. This covers restaurants across the nation. 

Support Local

USA Today’s Support Local does the same as the sites above, with more pickings from San Francisco and Austin than other cities. 

Help Your Hood

Help Your Hood is another marketplace for people to buy gift cards. On the website, it notes that if you don’t already have a gift card system set up in your business, the Gift Up App has agreed to waive its fees for the first $5,000 in vouchers for each business that comes through Help Your Hood. 

List your restaurant

Arteen Arabshahi, an investor at WndrCo, created a Google Form so restaurants could sign up to be featured on these services in one fell swoop. 

I worked at a local coffee shop during my last year of college right down the street from a Starbucks, Dunkin’ Donuts and a Caffe Nero. The owners lived a five-minute walk, one-minute sprint away. The cook, Brandon, came in at 4 a.m. to make fresh cranberry scones. If you brought a crying baby in, Ali, the previous owner, couldn’t resist giving you kind eyes and a fresh espresso brownie for free. And one customer came in every morning to grab four coffees to go, and came back every afternoon to return the tray so we could reuse it the next day.

That coffee shop is closed indefinitely, and like many restaurants, it is donating its inventory to people who might need it. The charm can’t be remanufactured, and I hope it opens again soon.

I’ll end with a note from Clover’s Muir. He said that gift cards are a “nice expression of good will but they’re not going to halt the giant wave that threatens to wipe out restaurants everywhere.”

So, let’s start small and give back. And then let’s hope that we see more government officials show up to help restaurants on a larger scale. 

Governor of California announces a statewide shelter in place

In a press conference, Governor of California Gavin Newsom ordered “all individuals living in the State of California to stay home or at their place of residence” to stop the spread of the novel coronavirus disease.

Earlier this week, Mayor London Breed issued a shelter in place for six Bay Area counties, including San Francisco, through April 7. Newsom’s order for the entire state will be mandated until further notice.

Essential businesses will remain opened within the state. This includes gas stations, pharmacies, grocery stores, food banks, farmers markets, and restaurants that offer takeout and delivery service. Businesses that must shutter indefinitely include dine-in restaurants, nightclubs, gyms, fitness studios, convention centers, and entertainment venues.

This decision to close restaurants, and keep people inside their homes, comes after Newsom claimed that roughly 56 percent of Californians are likely to get COVID-19.