As we step into the new year, it's not the best beginning. Layoffs are already hitting the headlines, just three days into 2024, bringing back the tough times we saw in the industry last year. In 2023, more people around the world lost their jobs than in any other year, with over 2.61 lakh employees getting pink slips. Now, carrying on this trend, two companies, Frontdesk and The Messenger, are cutting down their workforce. This adds to the growing number of employees facing uncertainties about their jobs due to the tough economic situation.
Frontdesk Layoff: The First Casualty Of 2024
Online rental platform Frontdesk has taken a severe hit, becoming the first tech startup to initiate mass layoffs in 2024. Shockingly, the entire 200-person workforce received the grim news through a brief "two-minute Google Meet call." The layoffs encompassed full-time, part-time workers, and contractors, signaling a dire situation for the proptech startup.
TechCrunch reported on Wednesday that Frontdesk CEO Jesse DePinto informed employees about the company's decision, further revealing that Frontdesk is on the verge of shutting down. The company plans to take the route of "filing for a state receivership, an alternative to bankruptcy." As of now, the startup has refrained from commenting on the reported developments.
Founded in 2017, Frontdesk had managed over 1,000 furnished apartments across the United States. Despite having raised a substantial $26 million from notable investors such as JetBlue Ventures, Veritas Investments, and Sand Hill Angels, the startup's attempts to secure fresh capital fell short.
Even more perplexing is the revelation that Frontdesk seemed optimistic about its financial prospects, having posted job openings, including a chief of staff role, on LinkedIn just two months ago. This move raises questions about the sudden and unexpected nature of the layoffs.
The unfortunate fate of Frontdesk adds to the alarming statistics of job losses in the technology and startup sector. Over the last two years, tech companies worldwide, including startups, have axed more than 425,000 employees. In India alone, more than 36,000 employees fell victim to layoffs during the same period. In 2023, the global technology and startup sector witnessed a staggering 2.6 lakh employee layoffs, all attributed to the prevailing global macroeconomic conditions that continue to plague the industry.
The Messenger Will Also Layoff Amid Faces Financial Struggles?
Adding to the distressing news, The Messenger, a digital news startup with ambitious beginnings in 2023, is set to cut approximately two dozen employees this week due to diminishing cash reserves. The tough digital ad market has put a strain on the company's operations, prompting this cost-cutting measure.
The layoffs, part of a broader effort to navigate financial challenges, are expected to occur this week. The Messenger, in a statement, acknowledged that it is "in the midst of a second-round raise," but specifics regarding the amount sought remained undisclosed. The statement notably omitted any mention of the impending workforce reductions.
The Messenger, which launched last year with around 300 employees, covers diverse topics, including politics, culture, and general-interest news. The startup's struggle against financial headwinds exemplifies the broader challenges faced by digital media companies in an increasingly competitive and demanding market.
As we step into 2024, these early layoff announcements cast a shadow over the prospects of recovery for an industry already grappling with the aftermath of the tumultuous year gone by. The continuous wave of layoffs serves as a stark reminder of the fragility of the global job market, leaving many employees uncertain about their futures in an ever-evolving economic landscape.
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