Bolt, the fast-growing online payments start-up that was valued at $ 11 billion earlier this year but which recently instituted a hiring freeze due to market swings in general, has begun to lay off. people Wednesday.
In a message to employees too published On Bolt’s website, Maju Kuruvilla, the chief executive, attributed the layoffs to “structural changes” amidst “macro challenges,” but did not provide further details.
“The management team and I have made the decision to secure our financial position, extend our track and achieve profitability with the money we have already raised,” wrote Mr. Kuruvilla.
The San Francisco-based company, which creates software to simplify the payment process for merchants and buyers, was already facing challenges, including a lawsuit filed late last year by one of its largest customers.
this month, a New York Times investigation found that the company and one of its co-founders, Ryan Breslow, had inflated the metrics and overestimated Bolt’s technology capabilities in pursuit of higher and higher valuations. In April, Bolt announced a three-month hiring freeze.
Bolt, which had around 900 employees, according to it LinkedIn profilesand recently acquired a cryptocurrency company, he’s hardly the only one in his struggles.
Since the beginning of the year, around 100 start-ups have laid off employees in a context of worsening prospects for young businesses, according to Layoffs.fyi, a crowdsourcing site that tracks layoffs in tech startups. In recent weeks, venture capital funding has run out as investors in general, shaken by the prospect of worsening inflation, rising interest rates and geopolitical uncertainty, have become more cautious. This has forced dozens of start-ups, which depend heavily on venture finance to build their businesses, to cut costs.
Wednesday’s layoffs crown a tumultuous time for Bolt. The company, which rose to a valuation of $ 11 billion from $ 250 million in January just over three years earlier, has been sued by its client Authentic Brands Group, a large holding company that owns and licenses brands. like Brooks Brothers and Forever 21. in the lawsuit that Bolt had failed to deliver on the technological capabilities he had promised. In his motion to dismiss the lawsuit, Bolt disputed elements of those allegations.
In his memo, Mr. Kuruvilla did not tell employees how many of their colleagues were fired or which departments were cut. But as workers were told they were out of jobs and their access was revoked, the number of employees in the company’s main Slack channel continued to decline throughout the day, according to two former employees and one current employee.
By noon they had dropped to about 660 employees, they said.
Bolt declined to comment beyond Mr. Kuruvilla’s message.