The robot reckoning may be afoot, as the New York Times finds that startups have laid off more than 8,000 people in the last four months.
The New York Times does not have a sterling track record of predicting San Francisco and Silicon Valley business patterns, as evidenced just ten months ago when their prediction that “San Francisco will drown in millionaires” was not borne out by said drowning in said millionaires (at least, not any more than it ever has been in the last decade or so.) But their latest analysis of our high-flying tech economy has hard numbers, and sobering ones at that for any company relying on the disruptive funding/corporate welfare that we call venture capital. Simply said, that shit is drying up fast, and Silicon Valley is experiencing startup layoffs at volumes not seen since the Kozmo.com bomb days. The Times posits that the startup boom is deflating in a piece that is behind a firewall, but also available for free on SFGate.
“More than 30 startups have slashed more than 8,000 jobs over the past four months,” the Times found. “Investments in young companies have fallen, with 2,215 startups raising money in the United States in the last three months of 2019, the fewest since late 2016, according to the National Venture Capital Association and PitchBook, which track startups.”
The poster child of the fall is probably the billion-dollar bust of WeWork — Fun Fact: WeWork has a new sex and drugs in the workplace scandal — and we told you last week that cash-bleeding delivery services DoorDash, Postmates, and UberEats have all discussed mergers. The Times reminds us there have been significant recent layoffs at 23andMe, Quora and Mozilla, plus a few of those robot companies we love to hate like robot barista startup Cafe X and robot pizza purveyors Zume, which has ceased delivery after burning through more than $400 million in investments.
But think of all the money those robots saved on labor cos — ahh, forget it.
The once-incredibly trendy scooter sector is taking its lumps too, as the biggest player Lime has pulled out of cities and laid off staff. The Times details another scooter startup that pulled in a six-figure investment, blew it all on ads, and only ever got 350 orders.
The name of that startup was Unicorn.
Image: @Doodles_2785 via Twitter