- Scooter startup Bird cut almost a third of its workforce in an online call on Friday morning, as the cash-guzzling startup prepares for the 'black swan' event to dry up funding.
- "Due to the financial and operational impact of the ongoing COVID-19 crisis, we are saying goodbye to about 30% of our team," a memo from Bird CEO Travis VanderZanden, circulated around the company, said.
- Bird said it is providing four weeks of pay, three months of health coverage and an extended time frame of 12 months for laid-off workers to exercise their stock options.
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Electric scooter startup Bird, which raised $275 million in funding six months ago, is laying off about one-third of its staff as it races to slash costs amid the coronavirus outbreak that has stunted its business.
The three-year old company, based in Santa Monica, Calif., did not say how many employees were affected by the layoffs but told Business Insider they amounted to 30% of the company's staff. Bird said the affected employees, who have been working at home because of the pandemic, were notified of the layoffs on a web call on Friday morning. But Bird said that the video feature on the web call was switched off.
"Layoffs are never easy or comfortable to do and COVID-19 has impacted the way they are done in at least the near term," Bird told Business Insider in a statement. "We purposefully and intentionally did not have any video on to protect privacy as we delivered the news live to individuals."
Instead of video, the company said it projected slides for laid-off workers to find out more about the benefits they were still entitled to - four weeks of pay, three months of medical coverage and an extended timeframe of 12 months to exercise options.
"Each individual then received a call or email from Bird's talent team as a follow up," the company added.
As companies reckon with layoffs at a time when staff are working at home, some have broken the news to affected employees by using Zoom video conference calls.
Bird later circulated a memo from CEO Travis VanderZanden that broke the news to employees. Coronavirus, a "once in a decade black swan event" threatened to be a massive financial strain on the company and prompted the job cuts.
"Due to the financial and operational impact of the ongoing COVID-19 crisis, we are saying goodbye to about 30% of our team," the memo, which was obtained by Business Insider, said.
Last October, Bird raised $275 million in a funding round led by CDPQ and Sequoia Capital. But Friday's memo from VanderZanden said that costs still needed to be cut to extend the cash-guzzling startup's financial operability until the end of next year.
"As you know, we just raised hundreds of millions from investors, but given all the uncertainty, we needed to ensure a cash runway to last through the end of 2021," the memo added.
Bird said it is providing four weeks of pay, three months of health coverage and an extended time frame of 12 months for laid-off workers to exercise their stock options.
Scooter and urban mobility startups hit hard
The coronavirus outbreak has caused financial markets and the economy to reel, and has already prompted startups like Wonderschool and TripActions to begin laying off workers in an effort to cut costs.
But scooter-rental startups are being hit especially hard as the coronavirus outbreak forces people indoors.
Bird and and its rival Lime have suspended services in response to the pandemic, cutting its source of revenue for the time being.
And although Bird stresses that its balance sheets remain healthy, raising more money is going to be increasingly difficult for venture backed startups in the future.
Bird competitor Lime is already looking for emergency funding, but the round could cost the firm heavily, cutting its valuation by 80%, according to a report from the Information's Cory Weinberg .
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