Bolt, the fastest-growing online payment startup valued at $ 11 billion earlier this year but recently introduced a recruitment freeze as the wider market faltered, began firing people on Wednesday.
In a message to employees, which was also posted on Bolt’s website, Maju Kuruvilla, the managing director, attributed the layoffs to “structural changes” amid “macro challenges”, but gave no further details.
“The leadership team and I have made the decision to secure our financial position, expand our corridor and reach profitability with the money we have already raised,” Kuruvilla wrote.
The San Francisco-based company, which builds software to simplify the cashier process for merchants and buyers, was already facing challenges, including a lawsuit filed late last year by one of its largest clients.
This month, a New York Times survey found that the company and one of its co-founders, Ryan Breslow, had inflated the measurements and overestimated Bolt’s technological capabilities in pursuit of ever-increasing ratings. In April, Bolt announced a three-month recruitment freeze.
Bolt, which has about 900 employees, according to its LinkedIn profile, and recently acquired a cryptocurrency company, is not alone in its struggles.
Since the beginning of the year, about 100 start-ups have left their employees amid deteriorating prospects for start-ups, according to Layoffs.fyi, a crowdsourced site that monitors layoffs in tech startups. In recent weeks, venture capital funding has dried up as investors in all sectors – shaken by the prospect of worsening inflation, rising interest rates and geopolitical uncertainty – have become more cautious. This has forced dozens of start-ups, which are heavily dependent on venture capitalists to set up their businesses, to cut costs.
Wednesday’s dismissal covers a tumultuous period for Bolt. The company, which jumped to $ 11 billion in January from $ 250 million just three years ago, is being sued by a client of Authentic Brands Group, a large holding company that owns and licenses brands such as Brooks Brothers and Forever 21. Authentic Brands told the trial that Bolt failed to deliver on the technological potential he had promised. In his appeal for dismissal, Bolt challenged evidence of these allegations.
In his note, Mr. Kourouvila did not tell the employees how many of their colleagues were fired, nor which departments were cut. But as employees were informed they no longer had a job and their access was revoked, the number of employees on the company’s main Slack channel continued to decline throughout the day, according to two former and one current employees.
By noon, it had dropped to about 660 workers, they said.
Bolt declined to comment beyond Mr Kourouvilas’s message.