Optimizely, a San Francisco-based startup that popularized the concept of A/B testing, has laid off 15% of its staff, the company confirmed in a statement to TechCrunch. The layoff impacts around 60 people, and those laid off were given varied levels of severance. Each employee was given six months of COBRA and was allowed to keep their laptops.
“As with so many other businesses globally, Optimizely has been impacted by COVID-19. Today, we have had to make a heartbreaking decision to reduce the size of our workforce,” Erin Flynn, chief people office, wrote in a statement to TechCrunch, adding that “today’s difficult decision sets up our business for continued success.”
The startup was founded in 2009 by Dan Siroker and Pete Koomen on the idea that it helps to have customers experience different versions of the website, also known as A/B testing, to see what iteration sticks best. A year after founding, the startup went through Y Combinator and in 2013 it signed a lease for a 56,000-square-foot office in San Francisco.
Optimizely last raised $ 50 million in Series D financing from Goldman Sachs, bringing its total venture capital secured to date to $ 200 million. Other investors include Index Ventures, Andreessen Horowitz and GV.
In June, Optimizely said it handles more than 6 billion events a day. Customers include Visa, BBC, IBM, The Wall Street Journal, Gap, StubHub and Metromile.
Optimizely was not listed as applying for a PPP loan, a program created by the government to help businesses avoid laying off staff. The loans were met with controversy in Silicon Valley, as some thought venture-backed businesses should turn to investors, instead of the government, for extra capital.
Optimizely’s layoffs are somewhat surprising, given recent earnings reports that show that enterprise SaaS companies have broadly benefited from the coronavirus pandemic. In an online work world, infrastructure and software services become more vital by the day. Box, for example, helps people manage content in the cloud and it beat expectations on adjusted profit and revenue. So why is Optimizely struggling?
There are a ton of reasons for layoffs beyond what the market thinks about a business. Optimzely’s customers are a mix of heavy-hitters in enterprise, but also include businesses that have struggled during this pandemic, including StubHub and Metromile — both of which had layoffs.
While the pace of layoffs is slowing down, cuts themselves aren’t disappearing. As the stocks show us, it’s a volatile time and businesses are looking for ways to stay financially safe.
This morning German healthtech MEDWING, whose platform helps healthcare professionals find opportunities and solves staff shortages, announces having successfully closed its €28 million Series B financing round, led by Cathay Innovation, with participation from existing investors Northzone, Atlantic Labs, Cherry Ventures and Adevinta.
Founded in 2017, MEDWING’s mission is to make working in the healthcare sector more attractive and to solve the shortage of healthcare personnel. The Berlin-based company wants to empower healthcare candidates to work in a way that suits their individual lifestyles and to support hospitals and care facilities in recruiting and human resource management. This is achieved through the combination of innovative matching, communication technology and personal consultation.
According to the World Bank, the global shortage of health professionals is expected to rise to around 20 million by 2030. In Germany, according to a survey by the Ipsos Institute, 6 out of 10 Germans (61%) believe that the shortage of healthcare professionals is the main issue of the German healthcare system.
In short, the healthcare sector needs to better manage its existing personnel, avoid misplanning and increase transparency. This is where MEDWING comes in, offering digital solutions for this purpose and aiming to become the leading one stop shop for jobs in the healthcare sector.
So far MEDWING has more 200,000 professionals and 2,500 partner hospitals, nursing homes and medical practices registered Germany-wide, making it the largest personnel pool and the most modern job matching system for the European healthcare sector. Every month, the startup registers more than 15,000 new candidates, places over 100 health care experts in permanent positions and fills more than 2,000 individual shifts via its own platform all over Germany.
With the fresh funds, MEDWING will develop further its features, products and services, which are specifically aimed at health professionals, hospitals and care facilities. The capital will also be used to expand its international business and team of 200 employees from Germany, France and the UK, to more countries.
Johannes Roggendorf, founder and Managing Director at MEDWING: “Our goal is to address the global shortage of healthcare workers and to improve access to healthcare globally. Today, we have the technology to think and live healthcare completely differently – making it better for everyone. For example, we can balance work and family life for healthcare professionals in a way that no one needs to be stressed out anymore. We make it possible for well-trained nursing staff who give up their job after a few years and do something completely different to return to their actual calling. It is not acceptable that hospital wards have to be closed due to staff shortages. We solve these important societal challenges. A goal that we share with our investors.”
Jacky Abitbol, Partner at Cathay Innovation:“The digitalisation of work and digital health are among Cathay Innovation’s core investment themes. MEDWING stands exactly at this crossroad and it is therefore no coincidence that with the returning of Costanza Carissimo to Europe, we chose the company for our first investment in Germany. MEDWING’s platform has already brought positive changes to the recruitment, human resources management and care of many hospitals and institutions, especially highlighted during this covid-19 crisis. We strongly believe in Johannes and Timo’s vision and are excited to leverage our global platform to support them as they expand further across Europe.”
It’s also worth mentioning that MEDWING is also leading the charge pro bono in the fight against the coronavirus, by placing nurses, doctors and non-medical volunteers in hospitals, nursing homes and private households, as part of the initiative ‘WIR WOLLEN HELFEN’. With this nationwide initiative in Germany, the company is helping to reactivate the ‘hidden labour force’. Within a month, over 10,000 professionals and volunteers have already registered with the initiative.
As the coronavirus pandemic continues, throwing countries into lockdown and recession, two of the hardest-hit sectors have been travel and events. And startups operating in the space that have recently raised significant funding aren’t immune to the crisis.
Pollen, the U.K.-based influencer marketplace for travel and events that closed $ 60 million in funding in October, has axed about 31% of its staff, nearly 70 people, across the US and Canada, TechCrunch has learned. In addition, multiple sources, who spoke on the condition of anonymity, say that around three dozen staff in the U.K. have been put on furlough and that up to 10 U.K. contractors have been let go.
Founded in 2014 and previously called Verve, Pollen operates in the influencer or “word-of-mouth” marketing space. The marketplace lets friends or “members” discover and book travel, events and other experiences — and in turn helps promoters use word-of-mouth recommendations to sell tickets. Pollen’s backers include Northzone, Sienna Capital, Draper Esprit, Backed and Kindred.
Confirming the North American job cuts, Pollen co-founder and CEO Callum Negus-Fancey (pictured right) told TechCrunch that 24 team members in Las Vegas have been axed, 29 in LA, 6 in Canada, and 10 that worked remote throughout U.S. That’s a cull of approximately 31% of Pollen’s 216 staff overall.
He also said that around 34 U.K. employees have been furloughed, and confirmed that the furloughed staff in question are being paid 80% of their salary up to £2,500 (via the U.K. taxpayer), with no top up from Pollen.
We also understand from sources that U.S. staff were provided with no additional severance, and that some staff were given as little as one week’s notice. Negus-Fancey doesn’t entirely dispute this, telling TechCrunch that “U.S. employees were given 1 week severance, plus 1 week for each additional year they [were] with the company” rounded up to the nearest 12 months.
The Pollen CEO also confirmed that U.S. employees were not given any paid additional medical benefits beyond the month they were served notice. However, each staff member laid off has the option to continue with COBRA coverage at their own cost.
Meanwhile, back in the U.K., a picture of confusion has emerged with regards to whether or not all U.K. staff put on furlough under the Coronavirus Job Retention Scheme will have jobs to return to.
Internal communication seen by TechCrunch shows Pollen management in late March discussing plans to make a group of U.K. staff redundant and then ask them to go on furlough in the interim anyway i.e. in a number of instances there wouldn’t be a job being retained.
Some days later, a series of group Zoom calls, rather than one-to-ones, were held between managers and teams affected. Accounts of exactly what was discussed on those calls vary, although some people present said attendees were “shocked,” with one attendee describing the atmosphere as “uncomfortable”.
Emails subsequently sent from team managers to a number of individual team members appear to offer confirmation that they no longer had a role at the company but would be offered furlough from 1st of April onwards. Those staff were also locked out of Pollen’s systems with immediate effect (Slack, emails etc.), and in some instances offered “next steps” coaching and help with job search.
Separate emails sent to affected staff by Pollen’s General Counsel sought “deemed consent” in relation to being put on furlough, giving them just 24 hours to raise any objections.
Asked about internal discussions with regards to redundancies and staff being told by their managers that they were being let go, Negus-Fancey disputes that U.K. staff put on furlough no longer have jobs to return to. In a statement provided to TechCrunch he said “there is a possibility for every employee who has been put on furlough to have their job back”.
Adds the Pollen CEO:
We believed it was appropriate to tell some employees it was unlikely they would get their job back – this seemed like the humane and appropriate thing to do. There was so much uncertainty at the time and we were processing/managing unknown territory and a lot of new information. We had no way of knowing the answer to the question and did not want to mislead anyone or give them a false sense of hope. This made sure that affected employees fully understood the situation and could plan accordingly. Some have looked for new permanent roles and successfully found a new role and we are happy for them. Our number one goal was to put our team first and support them during this time.
The scheme has been very successful, many employees who would have otherwise been made redundant will now keep their job. The extension of the scheme has further increased the number of jobs which will be saved at Pollen.
Furthermore, Negus-Fancey says “FAQs and other resources” were produced to help managers with furlough conversations, adding that if any management “miscommunicated” to U.K. staff that they were being let go, then this “would have been because of a misunderstanding”.
One question the Pollen founder wasn’t able to answer immediately was why some furloughed employees had access to the company’s systems revoked, while others did not, if they were all expected to return to work once the furlough period ended.
Initially, Negus-Fancey suggested it was so that furloughed staff wouldn’t be tempted to work (under the Coronavirus Job Retention Scheme, working for the company that put you on furlough is prohibited).
Later, after clarifying this with members of his U.K. team, he emailed to say that “employees who were furloughed who had the highest possibility of coming back (top of the list if jobs became available) were not locked out of some systems e.g. social tools. On top of this, anyone who asked not to be locked out, wasn’t locked out”.
Travel and events at a standstill
The upheaval at Pollen is just one example of the challenges that travel and events-focused tech companies have faced in recent weeks. With consumers virtually unable to travel anywhere or converge for any in-person group events, companies that have built business models around such leisure activities have found themselves scrambling to reduce their burn rate or having to more fundamentally change how they operate.
Airbnb is probably the most high-profile example. The popular peer-to-peer accommodation and experiences platform has seen a halt to much of its business in the last two months, leading it to lay off 1,900 employees (25% of its global workforce) and rethink its product offerings. It’s also seen its valuation nearly halved to $ 18 billion according to reports. Another example is TripAdvisor, which announced it was laying off 900 people, or 25% of staff.
In the case of event-based companies (events being a key part of Pollen’s business model), there is an argument to be made that even before the coronavirus took hold, it was a challenging business model for all but the most focused and scaled efforts.
Fyre Festival, with its own focus on exclusivity and influencer marketing, was an infamous flop; the U.K.’s Yplan eventually sold at a major loss, and Eventbrite, which is now public, has seen its stock drop drastically since mid-February, just as COVID-19 really started to take its grip on the globe. It’s not all doom and gloom — pre-coronavirus crisis, Get Your Guide had actually been scaling nicely — but it’s a grim situation.
Turning back to Pollen, the company says that even with the coronavirus crisis, it has been bringing in revenue by shifting to selling experiences for 2021. Asked about current burn-rate, post-layoffs, Negus-Fancey said Pollen does not disclose its cash position publicly. “However, we’re comfortable from a financial perspective,” he added.