At the end of May, employees of fintech startup Bolt saw a message from their CEO on the company’s Slack. It warned them that “restructuring” was imminent and that they should look for a calendar invitation: one group would attend a meeting with human resources, meaning they would be fired, while another would go to a “town hall” , which means they still had a job.
By the end of the day, 250 employees – almost a third of the company – had been released. The mood was sour. Amid the bitterness and anger, some employees simply felt confused. Bolt had just left $ 355 million in risk capital, and investors had estimated the start-up at DKK 11 billion. In April, Bolt reportedly spent $ 1.5 billion more acquire a crypto startup. Elsewhere, there were signs of a worsening market, but Bolt seemed to be doing just fine; the founder boasted that the company was growing “with lightning speed“An employee had even asked, in a recent town hall, if they should expect layoffs in a little while. The CEO, Maju Kuruvilla, had said no.
These types of insurances caused some of Bolt’s employees to take out personal loans from the company in order to exercise their stock options. Bolt’s founder, Ryan Breslow, had announced the program publicly in February, describing it as “the most employee-friendly stock option program possible.” Bolt would let employees exercise their options early and potentially buy more equity in the startup by taking out interest-free loans in the company. At the time, Breslow said so over half of Bolt employees had chosen to participate in the program.
One of these employees, a software programmer who asked not to be named because he is not authorized to discuss internal corporate affairs, took out a $ 100,000 loan to exercise his stock options when they were earned. To him, Bolt looked like a rocket ship, and he was willing to take the risk of the potential reward. Then, just months after taking the loan, he saw the “restructuring meeting” appear in his calendar. He was about to be fired.
Over the past many months, a number of startups have had to cut back on their staff, leaving thousands of employees in the lurch. Some, Klarna and Peloton, had grown their staff feverishly during the pandemic, only to lay off hundreds of jobs this spring. Venture capitalists are starting to turn off the fire hose with cash, and many start-up CEOs are realizing that they may not be able to get easy money anymore. In a blog posts To defend the layoffs, Kuruvilla described Bolt’s need to expand its course and try to become profitable with the money it had already raised. To do so, it had to sacrifice some people.
For Bolt’s employees, however, it felt like a whiplash. The startup had gone to an employment level by the end of 2021, adding hundreds of new people. Many of these new hires left jobs at major technology companies, such as Amazon and Google, only to have their positions disappear less than a year later. “I came to a startup because I’m willing to swallow some risks,” said the Bolt software engineer. “Sometimes you take a risk, you do your best, and it does not succeed. But that’s not how it feels. ”