“We have all seen the state of the market,” IRL CEO and co-founder Abraham Shafi wrote in a company-wide memo where the social app announced it would be dramatically cutting staff. Similar to dozens of startups over the past few weeks, IRL has just announced it’s laying off 25% of its team, or around 25 people, citing market dynamics. The cut comes around a year after the startup landed a $170 million SoftBank-led Series C and hit coveted unicorn status. 

What’s different from recent layoffs, though, is the company’s tone.

Courage is a decision, and we will choose courage,” Shafi wrote in the memo, obtained by TechCrunch. “Whatever we are facing today can’t be any worse than the uncertainty we met at the beginning of the COVID 19 pandemic.” 

Regardless of the state of the pandemic, though, layoffs force workers into an unexpected period of precariousness, augmented by the impending loss of health insurance. 

Despite the decision to cut staff, Shafi wrote that IRL has “more than enough cash to last well into 2024.” Over the last year, the startup increased its headcount by 3.5x, but Shafi noted that WhatsApp was able to grow to 450 million users with a team of 55. This suggests that the workforce reduction was less about trying to reduce runway, and more about right-sizing the team after a period of overhiring.

“Becoming one of these iconic, impactful companies is akin to winning a gold medal in the Olympics. In fact, probably more challenging,” the CEO wrote. “Like the Olympics, we know most people don’t want to be Olympians. In the same way, not everyone will want to walk the path we are walking. But for those that want to push their limits and find out what they are capable of, this culture is for you.”

Throughout the memo, Shafi emphasizes the employees’ necessity to “adapt” and be “disciplined.”

“I have been reflecting on Darwin’s observation that the highest indicator of survival for any living organism is not brute force strength, but how quickly it can adapt to its changing environment,” Shafi wrote. “This company is a living organism, and our ability to adapt to our changing environment is of the utmost importance.”

Going forward, IRL is focused on being an engineering-led organization, suggesting that the layoffs impacted other teams. 

An employee at IRL, who spoke to TechCrunch on the condition of anonymity, confirmed the layoffs and said that they “support the move and respect it.” 

“It shows a SoftBank company is taking responsibility, usually SoftBank companies get criticized a lot,” they said. “Financially, I know we’re good because I heard we have around $100 million still in the bank… years and years of runway.” The employee, who was not impacted by this layoff, said that the startup has a ton of new features, partnerships and prototypes in the works to create a more meaningful service in the future.

IRL was founded in 2017 as a way to help users find real-world events, but when the pandemic hit, the platform pivoted to prioritize the discovery of online events. The company told TechCrunch at the time of its Series C that it had 20 million registered users, with 400% growth over a 15-month period. But some employees told The Information that they were skeptical of the accuracy of these numbers. It’s unclear if IRL’s user growth played a role in today’s layoffs, but it’s more likely a combination of factors, including also the current economic downturn that’s impacting the tech industry more broadly.

Even as global lockdowns have eased, IRL remained dedicated to its new, digital-first strategy while also allocating money from its Series C to help bring back in-person events. At the same time, IRL also invested in its integration with TikTok and thought of itself as a potential “WeChat of the West.” It later acquired the “digital nutrition” startup AeBeZe Labs with an eye on making its service a “healthier social app.”

While the co-founder cites macroeconomic environment as reasoning to adapt, he also talked about how both individual economic hardship and recent tragedies like mass shootings could increase the demand for “humans’ need to feel connection and intimacy,” which is IRL’s mission.

“Now, our mission is not for the faint of heart. There will be naysayers, critics, hackers, spammers, and so on, he continued. “We will succeed as long as we focus on what we know and what we can control. Not just for us but our users worldwide.” 

Shafi provided the following statement to TechCrunch in regards to the layoffs:

“As we assess our path forward, we’ve had to make the unfortunate decision to reduce our team. We’re grateful for each of these individuals’ contributions in bringing IRL’s mission to life as well as the impressive business acumen that they brought to the table everyday. We wish our former teammates the best on their journeys ahead; They are talented people, and we have no doubt they will thrive anywhere. As such, along with the offered severance, we’ll provide any support where we can for those who may want it in their search for their next endeavor. As for what’s next for IRL, we’ll remain focused on building a product and community that creates more fulfilling human connections for the next generation.”

Sarah Perez contributed reporting to this piece. 



Source link

By admin

Leave a Reply

Your email address will not be published.