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Good morning!
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Major layoffs continue to rock Silicon Valley as many top players make public their underwhelming performances from Q3. Ambitious tech companies like Lyft and Stripe (which bought Paystack a few years ago) announced new rounds of layoffs just yesterday.
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As we saw in the first quarter, this is a trend that will spill over into the African ecosystem as the space is by large funded by Silicon Valley-type investors.
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What this means is that it's time for local investors to step in, and step in aggressively, investing in promising, market-familiar startups with shorter profitability timelines, because the Nigerian market needs to make its profits as soon as possible.
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Till then, brace yourself for even more layoffs. Hopefully, the shoe won't drop where you're standing.
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Below are the tech stories and news you need to know to start your day, carefully curated by Technext.
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Summary of the news
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- Lyft has cut 13% of its workforce
- Stripe, Paystack's parent company has also cut 14% of its workforce
- Jeff Bezos has been sued by a former housekeeper over working conditions and discrimination against other staff
- WhatsApp has rolled out new features, including Communities
- Elon Musk will begin layoffs at Twitter today
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Lyft cuts 13% of its workforce
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Lyft said Thursday it’s cutting 13% of its workforce, across all teams, CNBC reports.
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In an email to employees obtained by CNBC, CEO Logan Green and President John Zimmer pointed to what they called “a probable recession sometime in the next year” and rising rideshare insurance costs. But Lyft is not currently changing the guidance it gave last quarter.
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Shares of Lyft were slightly negative Thursday. Shares have fallen almost 68% year-to-date, bringing its market cap under $5 billion.
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Lyft said it has just over 5,000 employees.
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Green and Zimmer said in the email that the layoffs “were based on deprioritized initiatives, an effort to reduce management layers, broader savings goals, and, in some cases, performance trajectory.”
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For laid-off workers, Lyft promised ten weeks of pay, healthcare coverage through the end of April, accelerated equity vesting for the Nov. 20 vesting date and recruiting assistance. Workers who had been there for more than four years will get an extra four weeks of pay, they added.
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Stripe cuts 14% of its workforce
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Stripe, Paystack's parent company has announced that it’s laying off 14% of its workers, impacting around 1,120 of the fintech giant’s 8,000 workforce, TechCrunch reports.
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In a memo published online, Stripe CEO Patrick Collison conveyed a familiar narrative in terms of the reasons behind the latest cutbacks: a major hiring spree spurred by the world’s pandemic-driven surge toward e-commerce, a significant growth period and then an economic downturn ridden with inflation, higher interest rates and other macroeconomic challenges.
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See an excerpt from Patrick Collison below:
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We overhired for the world we’re in, and it pains us to be unable to deliver the experience that we hoped that those impacted would have at Stripe.
In making these changes, you might reasonably wonder whether Stripe’s leadership made some errors of judgment. We’d go further than that. In our view, we made two very consequential mistakes, and we want to highlight them here since they’re important:
We were much too optimistic about the internet economy’s near-term growth in 2022 and 2023 and underestimated both the likelihood and impact of a broader slowdown.
We grew operating costs too quickly. Buoyed by the success we’re seeing in some of our new product areas, we allowed coordination costs to grow and operational inefficiencies to seep in.
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Housekeeper sue Jeff Bezos over working conditions
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A woman who says she worked as a housekeeper for Jeff Bezos is suing the Amazon founder and companies that manage his properties, claiming she endured “unsafe and unhealthy work conditions” and was subject to racial discrimination by other staff, CNBC reports.
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Mercedes Wedaa said she was hired by Bezos’ staff in 2019 to help maintain the billionaire tech magnate’s Seattle-area property. Wedaa and other housekeeping staff regularly worked between 10 to 14 hours a day, and weren’t given adequate meal or rest breaks, she alleged in the lawsuit, which was filed Tuesday in King County Superior Court in Seattle.
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The lawsuit claims there was no designated break room or rest area, and no easily accessible bathroom. Wedaa and other housekeepers were prohibited from using a toilet in a nearby security room, which resulted in employees climbing out the laundry room window to access a bathroom, according to the lawsuit, which was earlier reported by GeekWire.
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Patrick McGuigan, an attorney representing Wedaa, said:
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No employer is above the law, not even Jeff Bezos and the organizations he uses to locate and hire people to work for him at his home and at his other properties.
Federal and state labour and employment laws dictate that working people must be paid for the work they perform and that they must be able to perform their work in a discrimination free, safe, sanitary, and healthy workplace. These laws must be adhered to by all employers.
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WhatsApp launches new ambitious features
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WhatsApp has announced the launch of its discussion group feature, Communities, and other new features; in-chat poll creation, 32-person voice/video calls, and a larger group option of up to 1024 users.
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This announcement was made on the WhatsApp blog yesterday, Technext reports. The update has started rolling out to users globally and will be available to everyone in the next five months.
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This new feature brings a plethora of new advancements to the messaging platform. However, most of these advancements have already been launched on the platform a while back, like emoji reactions, larger file sharing, and admin control features.
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Other features like in-chat polls, 32-person video calls, and a larger group option of 1024 users will also be particularly helpful for the new feature, “Communities”, especially as it was created for a wider array of individuals.
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Elon Musk Begins Layoffs at Twitter
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Elon Musk will begin laying off Twitter employees on Friday, according to a companywide email, culling the social media service’s 7,500-person workforce a little over a week after completing his blockbuster buyout, the New York Times reports.
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Twitter employees were notified in the email that the layoffs were set to begin, according to a copy of the message seen by The New York Times. Workers were instructed to go home and not go to the offices on Friday as the cuts proceeded. The message, which came from a generic address and was signed “Twitter,” did not detail the total number of layoffs.
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“In an effort to place Twitter on a healthy path, we will go through the difficult process of reducing our global workforce,” the email said. “We recognize that this will impact a number of individuals who have made valuable contributions to Twitter, but this action is, unfortunately, necessary to ensure the company’s success moving forward.”
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About half of Twitter’s workers appeared set to lose their jobs, according to previous internal messages and an investor, though the final count may take time to become clear. As the email landed in employee inboxes on Thursday evening, workers posted salute emojis and heart emojis in Slack, the messaging service. Later in the evening, some employees said they had lost access to the company’s systems, a possible prelude to being laid off
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Latest in funding
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Other stories we are following
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