More layoffs at Quirky, the New York startup that changed its business model after burning through $150 million
A third former employee placed the total at 20 people.
Founded in 2009, Quirky lets ordinary people submit ideas - like like bendable power strips and money straps for mobile devices - which it then turns into real products sold in stores like Bed, Bath, and Beyond and Home Depot.
But the startup has had a rough year.
In the past seven months it has laid off more than 20% of its staff (not including this new round), burned through tens of millions of dollars, recalled its line of connected-home products, and discovered that its founding business model broke at scale.
In February, CEO Ben Kaufman announced its new direction: Quirky would stop making so many products itself. Instead, it would partner with major brands like Mattel and Harmon through a new initiative called Powered By Quirky to let those big companies use its community of inventors to help them figure out new products to launch.
Sources say that these new layoffs come from Quirky's New York headquarters, as well as its Hong Kong and San Francisco offices, and that the Hong Kong office will now be essentially shuttered.
When Business Insider talked to Quirky in April, it had 274 employees. If that number stayed consistent, this layoff would represent about 11% of the total workforce.
One source tells us that around 2 PM Tuesday afternoon, New York employees were taken into one of four rooms. One room was for employees who were staying with the company, another was for employees that Quirky had recently hired through its acquisition of the organizational design startup Undercurrent, the third was for "transitional" employees who would remain on board for a little while longer, and the last was for the employees being laid off.
In April, Kaufman told Business Insider that he plans to raise a new round of financing over the next few months. These layoffs may be part of an effort to cut costs ahead of a new fundraise.
Kaufman had no comment when Business Insider reached him over the phone. Business Insider called and emailed Quirky PR and will update this post when we hear back.
If you're a Quirky employee or former employee and want to share your story, please reach out to jdonfro@businessinsider.com.