[HN Gopher] Bolt announces layoffs ___________________________________________________________________ Bolt announces layoffs Author : Lapz Score : 191 points Date : 2022-05-25 17:23 UTC (5 hours ago) (HTM) web link (www.bolt.com) (TXT) w3m dump (www.bolt.com) | thinkindie wrote: | just to understand: is this company product similar to Fast.com? | Is it also the case of an inflated valuation for a very low | turnaround? | kleinsch wrote: | I was in the middle of an interview loop with Bolt mid-Apr, they | canceled my onsite so they could (supposedly) prioritize | onboarding people they'd already hired. Dodged a bullet there. | Also did calls with Coinbase, Uber, and Twitter, who all now have | hiring freezes. | | Boggles my mind how companies flip on a dime between "hire as | fast as possible" and "the sky is falling, we're laying people | off." In the case of Bolt and Twitter, there were material | changes (lawsuit from major customer, Elon Musk) but the others | are just scared about the economy. | dvtrn wrote: | Conversely: "Slow to hire, fast to fire" is something I've | heard a few times in my career, and usually within | organizations that turned out to be truly toxic and absolutely | burnout inducing places to work. | | Operating on either extreme probably makes for captivating blog | posts and "leadership reading material" but in praxis seems | like it should be self-evidently a bad idea. | Lapz wrote: | The founder also encouraged employees to take on what was | effectively personal debt at an ~11B valuation when they only did | $5.2M in Q1... | Solvitieg wrote: | And "over half" of their employees apparently took on the debt. | | Source: | https://twitter.com/theryanking/status/1493609864534315014 | lelandfe wrote: | I'm awful at understanding company stock stuff. | | > _if the common stock becomes less than exercise price, | their personal assets are on the hook_ | | Can someone explain what that may mean for the >50% of | employees at Bolt that bought into this program, now? I'm | really struggling to grok what my quoted sentence entails... | | edit: thanks much for the quick explanations | johnzim wrote: | By taking part in this program, you are essentially taking | a personal loan, partially secured by your stock options | which will vest later. | | If you don't happen to understand Stock options: At a later | date you will have the OPTION to buy company stock at a set | price (often referred to as a Strike price) | | So some entity is lending you money because they know you | have Stock options and presumably will be good for the | money when they vest/mature. | | Of course, if the value of the Stock at the point of your | options maturing is LOWER than your strike price, you | essentially have earned yourself the option to buy $4 | apples at the price of $50 an apple. Eg: your options are | worthless (beyond their ability to purchase shares which | might not be buyable on a public market) | | So since you took out a _personal loan_ you now have to pay | it back. | | EDIT: I missed one thing - you actually get to exercise | _now_ if you take out this loan... This has slightly more | upside because it means that you could have in theory, sold | those shares for immediate upside on the secondary market | and thereby have de-risked yourself. If you didn't, then | you got hosed. You could also have a capital gains | advantage by spreading the gains I suppose | Karrot_Kream wrote: | These employees chose to take out a loan in order to | exercise the options. These employees now own the shares | that they exercised their option for _and_ a loan to pay | back the amount of money spent to exercise. If the price of | these shares becomes _less_ than the price spent to | exercise the option to receive the share, then the value of | the employees' shares is now _less_ than the price paid to | exercise. This means that if an employee wants to pay off | the loan, they first sell their shares, and then they're | still on the hook for the remaining difference between the | sale of the share price and the principal for the loan. | | For the Bolt employees who took this deal, I feel bad... | bombcar wrote: | "It was different in the 90s" will turn out to be "it's | exactly the same today". | JumpCrisscross wrote: | > _founder also encouraged employees to take on what was | effectively personal debt_ | | Do we have evidence to this encouragement? | nrmitchi wrote: | The literal entire twitter thread where he was bragging about | it and how great it was for "his employees". | | There is basically no way to read that thread where it | doesn't sound like an encouragement. | Lapz wrote: | This thread https://twitter.com/theryanking/status/1493390167 | 461224451?s... and | https://twitter.com/theryanking/status/1493609864534315014 | stu2b50 wrote: | https://twitter.com/theryanking/status/1493390184897032201 | | I presume the Twitter braggery counts as encouragement. | [deleted] | nklende wrote: | I had a smaller YC company pitch me something like this as an | option for my stock comp - an RSA (restricted stock agreement, | or "founder's stock"), where I put up all the cash up front, | paid a big income tax bill in the first year, but then upside | was all capital gains. I would technically own the stock but I | had to sell it back for nothing if I left before it vested. | | Turned out I left very early because the company wasn't doing | great, in the current climate I think they're probably default- | dead. All that cash is just gone. | break_the_bank wrote: | Wow. How'd they make you pay upfront and still make you wait | & vest? This makes no sense. | gkoberger wrote: | For what it's worth, this is how it works for founders too. | The amount you pay is stupidly small (usually well under | $100), since the strike price is essentially $0. There's no | legal designation for founder when it comes to stock, so | this person just got the same deal the founders did. | chowchowchow wrote: | This is actually a great deal when the exercise price is | low enough. You pay a nominal-ish amount up front to | exercise early and all gains are LTCG. It is not a good | deal in any situation where you're not getting in close to | the ground floor though, if the exercise cost itself is | substantial. | upupandup wrote: | > There IS risk to the employee; they now have a real loan | outstanding and 100% personal recourse, so if the common stock | becomes less than exercise price, their personal assets are on | the hook | | https://twitter.com/theryanking/status/1493390184897032201 | | HOLY CRAP. How is this even legal??? | pfarrell wrote: | "Don't spend real money on fake money." | | Good advice I got from colleagues at a 2000 era company who | took out loans to buy their options and cover the taxes when | the stock was at $50/share and then watched it drop to | <$1/share while they were in a lockout window. I worked with | people who had 6 figure loans they owed on for worthless | stock. Took years for the stock to recover. | berberous wrote: | It was an option, not a requirement. There are pros/cons to | doing it, but it was ultimately the employee's decision. I'm | sure the risks were well disclosed. The issue is >50% of | employees don't understand any of it, no matter how well | explained and disclosed. | gruez wrote: | >HOLY CRAP. How is this even legal??? | | You missed the tweet directly under it: | | > Therefore, we made sure to give every employee ample time | to read about the pros and cons of this decision, including | learning about all the risks in the business, and we gave | every employee a $300 stipend to consult a financial advisor | during the implementation process. | | I understand making things illegal to protect people from | being swindled because they don't know any better, but if you | made decision even after consulting a financial advisor | that's on you. | nrmitchi wrote: | It's kind of different when that decision is saying to your | boss "Naww, I don't think I'm going to take the offer that | the CEO was bragging about on Twitter. I guess I just don't | believe in the company enough." | | It may not be perfectly valid, but it's very easy to see | how someone could feel like they didn't really have a | choice if they didn't want to sabotage their position and | future at the company. | nemothekid wrote: | I can't see why it should be illegal. People take on debt to | buy assets all the time. But this is just so irresponsible | and immoral; I really doubt the leadership is actually | running a sustainable business; and I'm also starting to | seriously doubt there was any credibility to the whole | YC/Stripe boys club thing. | | 1. Ryan (was) the CEO, and can pressure employees to buy | stock (or let them go because they aren't "committed" | enough). | | 2. Ryan loses nothing if the company fails (his personal loss | has probably already been covered since the first VC round), | but each employee is left with a mountain of debt. | | 3. It's just bad advice. I know plenty of people who took out | loans for stock; and I would never recommend it; it's | incredibly risky especially if it can destroy you if it | fails. If leadership plays so fast and loose with other | people's money, you have to question how well they are doing | their job. | JumpCrisscross wrote: | > _can 't see why it should be illegal_ | | Borrowing against one's shares shouldn't be illegal. | Companies lining up recourse financing for their employees | should. | | How were the terms of the loans chosen? Who knew who was | and wasn't participating? How was it ensured this wouldn't | factor into personnel decisions? How were/are the people | setting the strike prices of options segregated from the | people setting the terms of the loans? There is too much | already loaded onto the employer-employee relationship, we | don't need to add lender-borrower to the damn mix. | | (Side note: the $300 stipend for financial advice is | laughable. You couldn't even get a lawyer to review a | fraction of such an instrument for that amount, and yes, | I'd put recourse loans against private shares in the risky | as hell bucket which should absolutely be legally | reviewed.) | berberous wrote: | The strike prices of options are set based on a 409A | valuation. | | These are "cashless" loans, which are recourse for tax | purposes (so that the IRS respects this as a true | purchase of shares, in order to start people's LTCG and | QSBS clocks). The terms were likely very favorable, i.e. | set with an interest rate equivalent to the AFR. This is | not a situation in which the company is trying to make | money as a lender. | | This is no riskier than deciding whether or not to | exercise your options, which typically employees have to | decide within 3 months of leaving a startup. | | The risk is not in the terms of the loan, but in whether | the employee wants to exercise and lay out the cash (or | the promise to pay the cash); in each case, it's an | investment decision to decide whether it's worth it given | that the stock is risky and could eventually be worth | zero. | | Note that all these issues are driven by tax rules, and | generally not the startups. Startups are damned if they | do, damned if they don't. | | Every type of equity has pros/cons. If it's an immaterial | amount of money, the employee should be a big boy and | just decide whether or not to risk the cash. If it's a | material amount of money, the employee should really be | speaking to their own advisors, which if they have a | material amount of equity, they should be able to afford | to do. | nemothekid wrote: | > _Companies lining up recourse financing for their | employees should._ | | Wait the _companies_ set these loans up? I thought they | were just going to a bank and getting something akin to a | personal loan or some other 3rd party collateralized | loan. | | Might as well work for free at that point. | berberous wrote: | It's a cashless loan. If you have options that cost | $10,000 to exercise, the company lets you pay with a | promissory note (promising to pay the $10,000, plus | minimal interest set at the IRS's AFR). This is | effectively the same as the company loaning you $10k, and | then you hand it back over to exercise, but the cash does | not change hands. | | If you were to get a private loan, the interest would be | much higher. | | The company does not want to be in the business of making | loans, but this is a way to allow the employee to | exercise upfront (and thus potentially get certain | benefits, like in a good exit scenario, of having gains | be subject to LTCG and not ordinary income), in the best | way possible. But in a downside scenario, like the | company folding, the person is on the hook for the loan | just like if they had decided to exercise with their own | money. | [deleted] | librish wrote: | The founder pushing employees to take such a reckless financial | decision while presumably their only insight into many key | business metrics is the leaderships rosy portrayal of them is | unethically irresponsible. | pbreit wrote: | By "pushing" you mean "not pushing"? | [deleted] | hm8 wrote: | At this scale/valuation of the company, it's probably a bad | idea but hard to know at the time. My understanding of US tax | laws and options is that this sort of behavior is what you | want for early stage startups. You allow early exercise, | restricted vesting with the upside of paying no income tax | now, only LTCG on vesting (+liquidity event), and potentially | QSBS tax exemption if you joined early enough and the startup | does well. | nrmitchi wrote: | Well sure, but the QSBS exemption cutoff is literally 220x | less than the valuation Bolt was trying to see this on. | bobbygoodlatte wrote: | QSBS cutoff is $50M in gross assets owned by the company, | not $50M valuation. There are many cases where a | valuation can be far above $50M yet still qualify. That | said, I have no idea if Bolt would qualify here. FWIW | financial services companies don't qualify for QSBS at | all, so Bolt may fall under that | fdgsdfogijq wrote: | Talk about turning your employees into bagholders. | [deleted] | hahaxdxd123 wrote: | where did you get $5.1m? | dburn1169 wrote: | > when they only did $5.2M in Q1... | | This is insane to me. I work at a startup with a similar | valuation and we bring in almost double that amount of revenue | a week... and I think we're overvalued. | silentsea90 wrote: | 10M a week = ~500M a year. 10B valuation. wow. Where is that? | beambot wrote: | 20x Price-to-Sales (P/S) multiple on trailing-twelve-month | (TTM) revenues is actually on high-end of of sub-$20B SaaS | right now -- it's just the new reality. Examples from | public markets: | | Cloudflare ($NET) TTM revenue is $0.73B and $16.9B | marketcap (23x P/S). | | DocuSign ($DOCU) TTM revenue is $2.1B with $15.5B marketcap | (7.3x P/S). | | UIPath ($PATH) TTM revenue is $0.9B with $9B marketcap (10x | P/S). | | Okta ($OKTA) TTM revenue is $1.3B with $13B marketcap (10x | P/S). | upupandup wrote: | > it's just the new reality | | I wonder whether they are prepared for the next reality | where these multiples is no longer sustainable. | scarface74 wrote: | I never cease to be amazed at how people value companies | based on revenue and not profit. Revenue without profit | numbers tell you nothing about how well the company is doing. | beambot wrote: | To do a proper net-present value calculation, you need more | than just revenue & profit. You also want to know growth | rate, gross margin, and capital efficiency. | pbreit wrote: | It's easy to envision profit so towards the beginning | revenue is much more important. | scarface74 wrote: | Unless you are in the midst of a best market where VCs | don't see a clear exit strategy where they can have a | successful exit while the company still isn't profitable. | If you were a startup founder, would you really want to | have to depend on continued rounds of funding in this | environment? | JumpCrisscross wrote: | > _how people value companies based on revenue and not | profit_ | | Profit is a closer abstraction to cash flows ( _i.e._ to | the investor) than revenue, but it 's still an abstraction. | Investors looking at revenues and unit economics can | sometimes--often--predict future profits and discount | backwards, in the same way that a value investor can look | at a company's profits and sometimes--less often, frankly-- | predict future cash flows from dividends or M&A and then | discount backwards. | scarface74 wrote: | Profit isn't an "abstraction". If you bring in more money | than you spend, it means that you don't have to worry | about a "runway", nor do you have to worry about outside | funding. | | How can you have a successful business that spends more | money than you make? | JumpCrisscross wrote: | > _Profit isn't an "abstraction"_ | | The term profit covers a number of metrics. All of them | are abstractions. The number of assumptions that go into | a GAAP profit figure is uncountable. Profit on a cash | basis is less wiggly, but it's still--for valuation | purposes--useful only inasmuch as it is an estimate of | actual cash returns on the investment. | | > _you bring in more money than you spend, it means that | you don't have to worry about a "runway", nor do you have | to worry about outside funding_ | | Lots of ways for cash-flow positive businesses to be | running themselves into the ground. Garden variety is off | balance sheet liabilities, though people certainly | | > _How can you have a successful business that spends | more money than you make?_ | | Nobody argued this, not for the long term. But there are | loads of situations in which losing money in the short | term is the long-term savvy move. (This literally | describes all investing. You send cash out when you | invest.) Valuation involves estimating the value of those | future earnings today. | cecilpl2 wrote: | Amazon famously turned no profit for nearly 15 years. | When you run a large business you can do things like | reinvest what would have been profit into new projects. | This is the whole point of a growth company. | | Recognize that, simplistically, Profit = Revenue - | Expenses, and that expenses is a dial which can be turned | somewhat arbitrarily. | missedthecue wrote: | I don't think the important thing is necessarily profit, | but margins. According to Bezos, Amazon had positive | contribution margins from day 1. | scarface74 wrote: | Amazon basically always had positive marginal revenue - | unlike most of the startups. | | People like to cite the one case where it worked and seem | to be forgetting that most of Amazon's profit comes from | AWS. What are the chances that any of these startups are | going to pivot to a competent different vertical to shore | up their main business? That's just like saying all you | have to do is rehire the former CEO after a 10 year | absence and become a trillion dollar company after almost | going bankrupt. | | And no Amazon did not use "excess capacity to jump start | AWS". | | https://www.networkworld.com/article/2891297/the-myth- | about-... | VBprogrammer wrote: | In theory you outspend all of your competitors such that | they go out of business or otherwise lose out on the some | network effect. At that point you flick the profit switch | on and start swimming in pools of money. | | I wouldn't like to guess what the success rate of this | game is though. | matwood wrote: | > How can you have a successful business that spends more | money than you make? | | Today or tomorrow? | | If a company has to spend more than they make today in | order to build something they can sell for profit | tomorrow, that's investing in the future. | | Just looking at revenue or profit is too simplistic. It's | also too simplistic to only look at a single point in | time. | dburn1169 wrote: | I'm not valuing my company solely by revenue, but it's | easier to compare the values of startups by their revenues | as a good chunk of startups are focused on growth and not | profit - and thus aren't yet profitable. Will that start to | change with the current macro environment? Probably. Was | only trying to point out how out of wack valuations have | gotten. | scarface74 wrote: | Investors in startups value a company based on the | likelihood that they can pawn off a money losing company | either to the public markets or an acquirer. | | That doesn't help now that the public market doesn't have | an appetite for companies that aren't profitable. | | So if retail investors aren't interested in non | profitable companies, there is no profit it in it for | investment bankers to flip the stock at IPO to take | advantage of a "pop" meaning that VCs are less interested | in throwing good money after bad. | | How have the former "unicorns" focused on "growth" fared | in the last few years? | | For instance DoorDash couldn't make a profit during a | worldwide pandemic when everyone was ordering takeout. | rnk wrote: | I don't think that's always true. If you are in that | company, they almost certainly have exposure to the cost of | those sales and the rate of sales growth, but also the cost | to support more users. That gives you a good sense. | | If you service has complexity and needs lots of hand- | holding and is expensive to generate the sales, then it's | harder to say what to do with sales numbers. | vira28 wrote: | One of the things that I would consider before joining any | startups is just how good sane (or humane or whatever appropriate | word) the founders are. Don't go behind all the PRs. Just try to | find whether the people who founded are actually good people. | What are their ethics. All these are subjective qualities so it's | difficult to weigh but that's where the money is. | | edited (I understand I might not have described what I mean | clearly). | treyfitty wrote: | Why do CEOs feel compelled to say "this is the hardest decision | I've ever had to make." Hoping a CEO can chime in here... is the | decision really that hard? It seems like they are just trying to | not seem like a dick, when we all know they're just looking out | for their own best interests (not saying this is wrong, but not | saying this is right either). Just genuinely curious how much | "fluff" that statement contains. | nrmitchi wrote: | First of all, there is no mention of what percentage of their | workforce is being directly effected by this. I suspect it is not | small. | | That aside, I fail to see this as anything other than this | "company" taking advantage of the current environment to execute | layoffs in a way that lets them blame "the market" rather than | their own short-comings. We saw this in March 2020 as well. They | overhired for the hype, and now are taking advantage of any | excuse that isn't "ya we hired way to many people so that we | could say we are bigger than Fast". | | Bolt apparently raised $355 million 4 months ago. If they are | having cash problems, or are concerned about not having enough | runway, I don't believe for a second that any magnitude of | layoffs will help them. | [deleted] | lr4444lr wrote: | Even if this is true, we're looking at a tight money policy and | a bear market in tech broadly with no end in sight. Pre-profit | companies need to protect their hides, and I expect to see such | reflected in layoffs and attrition. | nathanaldensr wrote: | "Pre-profit companies" LOL. So _that 's_ what they're calling | them nowadays? | | Talk about euphemisms... | ushakov wrote: | Twitter still has that status! | peripitea wrote: | Why is it a euphemism? Delaying profits as a primary | objective has been a common startup strategy for decades. | rvnx wrote: | Pre-business plan | trhway wrote: | >Bolt apparently raised $355 million 4 months ago. If they are | having cash problems, or are concerned about not having enough | runway | | well, may be there is a connection : | | "Earlier this month, Bolt announced it was purchasing crypto | startup Wyre Payments in a deal worth reportedly worth roughly | $1.5 billion." | nrmitchi wrote: | I was under the impression that that acquisition (along with | their previous ones) was all stock, but apparently it was a | mix. In hindsight, that seems like a poor decision. | Rafert wrote: | Don't forget they're getting sued by a large customer of theirs | too, claiming their solution doesn't deliver what was promised: | https://www.pymnts.com/legal/2022/authentic-brands-sues-bolt... | nrmitchi wrote: | Oh I didn't, but I (shockingly) didn't think it was relevant | here in comparison to the $355M dollars that they recently | raised. Even an expensive lawsuit would be unlikely to put a | big enough dent in that to materially affect their runway, | and it's not like "losing more sales" can make their existing | revenue much lower (again, in comparison to a $355M war | chest). | bko wrote: | Why do you need an excuse to perform layoffs? Sometimes | companies over-hire or hire the wrong people. Other times they | scale back certain efforts and are left with people that don't | fit into the organization anymore. I feel sorry for the people, | but layoffs are part of a normal process and with economic | downturn we're facing, that will almost certainly impact their | lines of credit and fundraising. So the prudent action would be | to lay people off. | stanleydrew wrote: | You don't _need_ an excuse, but if you have one then | management can save face. The theory would be it 's a lot | harder to hire people in the future if everyone thinks you're | bad at management, and much easier if everyone just thinks | you got unlucky with market timing. | kodah wrote: | Came here to say this, it's one of the first things I | investigate about a company. If the company does habitual | layoffs or has done rather large ones in the past five | years, I'll move on 90% of the time. | iepathos wrote: | Yes, this. Thank you for pointing out the scapegoating. | [deleted] | 88913527 wrote: | The more businesses do this, the more the hiring market becomes | lemons for unicorn-type businesses. Prospective employees will | wonder if they're an overhire and if question their | expectations of job security. | firebaze wrote: | It's just about the opposite. Know and play your cards. | autokad wrote: | yeah. lots of companies already froze hiring (firing through | attrition). Bolt doesn't make a trend but it gets my | attention. | | edit: I saw on blind indicating its 15% of workforce | mkozlows wrote: | That's always been true, and not just for unicorns. Big | companies let people go in bad times, too; and small | companies just fold. | throwaway5752 wrote: | The more businesses do this, the more people will be out | there who will just be happy for a paycheck and health | insurance. Prospective employees will start to be less picky | and have fewer options, sadly. It's not going to be a good | time for a lot of people. | tschellenbach wrote: | Always ask about valuation and revenue. If the multiple is | very high run the other way. A high multiple makes it less | likely that your stock will be worth something, it also makes | it more likely that the company will have to do layoffs in | the future. | IMTDb wrote: | Both "we overhired" and "it's because of the market" can be | true at the same time. | | You get a $335 million in Feb with a common understanding with | current investors that you are going to raise $ XXX in roughly | 24 month, depending on results compared to an agreed upon | business plan. You thus plan for a roughly 24 month runway. 4 | month later (now) you get a call from your investors that your | planned next series is going to be significantly lower/harder. | You now need to stretch your 24 month runway to at least 36 | month. SO you have to adjust plans. | | They didn't overhire compared to the initial plan, but | overhired compared to the current situation, where basically | all rounds are 50% lower and many are just not happening at | all. | | The ycombinator downturn letter | (https://techcrunch.com/2022/05/19/yc-advises-founders-to- | pla...) just says something like this: | | > The safe move is to plan for the worst. If the current | situation is as bad as the last two economic downturns, the | best way to prepare is to _cut costs and extend your runway | within the next 30 days_. Your goal should be to get to Default | Alive. | | That sounds exactly like what Bolt is doing. | nrmitchi wrote: | > They didn't overhire compared to the initial plan... | | Frankly I don't care what their plan was if they "planned" to | spend ~350M in 2 years while making 10-40M in annual revenue | while getting sued by their largest customer. That is an | absolutely insane level of spending. Just because you had a | plan to do some unsustainable and irresponsible crap doesn't | absolve you of responsibility when it turns out to be | unsustainable and irresponsible. | | > The ycombinator downturn letter ... | | You really think that Bolt, and Bolt's ex-CEO, saw a letter | from _YC_ , and thought "Oh ya, let's definitely doing what | YC said. YC definitely knows what they're talking about. I | personally trust all of their decisions and statements."? | idealmedtech wrote: | Do we know the terms of this raise? I wouldn't be surprised if | it's released in tranches based on KPIs. | hintymad wrote: | For a small company, "over hiring" is always a sign of | incompetency of the management. Think about the good company in | the early days. They can do so much with so few people, like | one person evolving zookeeper into a beast to handle FB's | scale, or two people implemented LevelDB in a matter of months, | or one person figured out a way to increase the density of co- | lo rack by 10 times. | vira28 wrote: | > or one person figured out a way to increase the density of | co-lo rack by 10 times. Curious, whom are you referring? | Sorry for my ignorance. | bko wrote: | Reminded me of this: | | > Coinbase ended Q1 with 4,948 full-time employees, up 33% | versus the fourth quarter of 2021. Over the past twelve | months, Coinbase also said in its first-quarter report that | the company added over 3,200 net new employees. | | https://www.coindesk.com/business/2022/05/19/coinbase- | outlin... | ushakov wrote: | that's a crazy amount for a crypto wallet | | are these new hires lobbyists? | silax wrote: | The best thing they could do at this point is give employees and | investors their remaining cash. They won't, but I bet they'll | wish they did. | ProAm wrote: | Why? Business will continue, they are just trimming fat | (excessively) based on what the market is doing. Next 2 years | might be rough, especially for ecommerce. | silax wrote: | In general, I agree. But for Bolt in particular- they have a | 2500x _ARR_ multiple, and their top customer is suing them | for "utterly failing to deliver on its promises" due to | incompetence in software and lying about the details of their | relationship, and the general sentiment of the company and | founder is that of fraud, and the direct competitor just went | out of business for very similar reasons, and the TAM of the | market is less than they've raised in VC- I'd say the | employees and investors can do greater things with the | remaining capital. | avl999 wrote: | Their careers page weirdly shows them still 'hiring' for lots of | tech and non-tech roles https://www.bolt.com/careers | cosmiccatnap wrote: | I'm really tired of this "this is one of the hardest messages" | cold open. You have thrown innocent people under the bus because | you don't know how to balance a budget and mitigate risk. One | thing none of these messages have ever done as far as I'm aware | is take responsibility for their actions. | bigtones wrote: | Bolt laid off around a third of their workforce accord to The New | York Times, from just over 900 employees to around 660 as counted | by active Slack users internally. | | https://www.nytimes.com/2022/05/25/business/bolt-layoffs.htm... | druther wrote: | More interesting details at https://nypost.com/2022/05/25/bolt- | lays-off-staff-as-payment... | seizethecheese wrote: | For those who've seen layoffs first hand: do lower performers | generally get laid off first, or is it more random? | kasey_junk wrote: | It really depends on the layoff strategy and there are lots of | those. | | But for the most part you should treat it as random. For | instance I was in the room when a company decided to shut down | a whole location, even though it was very high performing. The | reason? It had the lease ending soonest so they could cut even | more costs there. | PragmaticPulp wrote: | It's definitely not random, but it's not perfectly ordered | according to merit/performance either. | | Some times entire departments are laid off if their projects | are part of the cuts. You can be the best performer and still | get laid off if you're in the wrong department. Some times | companies will identify key employees and ask them to "re- | apply" for other positions at the company in other departments. | | More often, cuts are made throughout the organization. If the | company is laying off 5-10% of employees then it's usually not | that difficult to identify underperforming employees if | management goes in with a scalpel. However, once the layoffs | grow to 20-30% or if the layoffs are imposed at a team level | (many teams are 100% good performers) then you have no choice | but to lay off good performers as part of the plan. | | Actual strategies vary depending on circumstances, but | generally you retain people who have the most experience on | critical items whereas newer hires and people working on | random, nice-to-have type projects are at high risk. Anyone | with an unusually high compensation relative to their | performance is also a likely target for cuts. If everyone on | the team is performing similarly but some people are making 50% | more than others (seniority, better negotiating, etc.) then | you'd rather lay off two of those employees than three people | at more traditional pay. It's about budgets, not headcount. | thewarrior wrote: | Are managers and senior middle management more protected from | being laid off ? | throwaway7104 wrote: | After reading last week's leaked YC letter to founders, I was | suspecting that this would be a shockwave staggering the startup | scene. | | I'm not working at Bolt, but this week our (not large) company | has announced a 20% layoff and essentially made it clear that we | shouldn't count on any investment funds in the foreseeable | future. | | Hard times with all these investment sources drying up, but so | far this crisis is localized to the tech world, unlike the dotcom | bubble was. I sincerely hope that it will stay this way. | kadomony wrote: | Waiting for Ryan's tweet storm eagerly to see how blame is | shifted to VC and Stripe. | upupandup wrote: | Thanks to him, lot of people in the industry are now a bit | wiser and more careful while others simp for the establishment | because they seek to benefit, are benefiting (maybe in the | minds of some, they think they are reading this board and | looking at profiles of users who simp or attack them?) | | When he outed YC, Sequoia Capital and New York Times, I felt | uneasy because I knew there would be blowbacks. | kodah wrote: | I was on that thread, I have no idea what Bolt did at the | time and I don't use Stripe. | | Ryan didn't even look at the timestamps for the posts he was | referencing: https://news.ycombinator.com/item?id=30069359 | Everything else he said was pure speculation and story- | telling. | | Anecdotally, most people on HN _hate_ the NYT; it should give | you pause if even these people did not buy Ryan 's story- | telling. | Permit wrote: | The only thing he "outed" was his inability to read | timestamps: | https://twitter.com/theryanking/status/1485784882173255680 | | He claimed Stripe copied his blog post, but when you click | the links you'll see that Stripe's post was submitted earlier | than his! This was his big "WHO WANTS PROOF?" reveal. He does | not walk away from this looking good. | tuckerman wrote: | Just in case others aren't familiar, dang shared an extremely | detailed and respectful refutation of some of Ryan's | accusations: https://news.ycombinator.com/item?id=30070287 | | Edit: added "some of" | 1270018080 wrote: | Thanks to him, I think he's a little bit unstable. His rants | are a out there for sure. | 88840-8855 wrote: | it should not be a surprise that hypergrowth companies face | difficulties in current conditions. | | the layoffs will continue and hopefully contribute to a | normalization of dev salaries. | | i find the crazy salaries that devs received in the last years | obscene. | | edit: kids, stop down voting without comments. i have met too | many arrogant software engineers, data scientists in the last few | companies I've worked at. many entitled juniors, too many | arrogant seniors. it changed my view of this field | nso95 wrote: | God forbid people be well paid | gedy wrote: | High salaries mean little if people have to self fund 20-30 | years of retirement and pay crazy prices to live near work. | torbTurret wrote: | The only arrogance in this thread is you calling others "kids" | and demanding comments. | blitz_skull wrote: | Why do you find obscene? | c7DJTLrn wrote: | The wording of these always makes my skin crawl. Just say what's | happening and what led to this decision. Numbers, not handwaivey | rhetoric like "we need to focus". | TomBombadildoze wrote: | I tried to order a Solo Stove last fall. I placed the order, they | accepted it, everything seemed like a normal e-commerce | experience. _Two days_ later, I received an email saying my order | had been canceled for suspected fraud. I 've never had that | happen before, and it hasn't happened since. My experience is | obviously anecdotal but their fraud detection routine clearly had | major flaws. | | With news of layoffs at Bolt, I wonder how many partners lost | sales like mine. | honkycat wrote: | Ugh. I have a bunch of money saved up but I am terrified this is | going to be the great depression 2. | Apocryphon wrote: | Between them and Treehouse, hope no one tries to spin this to | attack companies experimenting with the four-day workweek. | staunch wrote: | Generous severance is the ethical test of a CEO during a layoff. | It softens the blow of a layoff immeasurably to provide 4-6 | months of severance. | | If a CEO won't do it, the remaining employees should question the | CEOs ethics, and ask themselves how they will be treated in the | future. And if the business literally can't afford to do it | (which is rare), then everyone should question the CEO's | competence. | | As customers, we should all do our best to avoid and boycott | companies that do layoffs without providing generous severance. | Because who wants to do business with an unethical or incompetent | company. | | If anyone knows what severance Bolt is paying, let us know. | fdgsdfogijq wrote: | This company is probably going to go under. Huge severance is | going to eat into their already short runway. Sometimes its | just not there. And most of their engineers are highly capable, | they will be fine. Its part of working for a high tech startup. | bombcar wrote: | And since they're trying to sell to companies, said companies | will be less likely to make deals with them if they think | they'll go under soon. | break_the_bank wrote: | Given the CEO suggested people buy the equity while taking | personal loans in the last raise in February, I doubt the | goodness of the severance. | fdgsdfogijq wrote: | Rumors going around on blind (posted by bolt employees) that over | the course of a few rounds of layoffs it will be 30-50% of the | total workforce. A lot of the initial layoff are software | engineers. Apparently they only have 12-18 months of runway, and | need to effectively double that. Current revenue is 40M. | | I guess this is the beginning of the tech washout. _clings to | large tech company job_ | | EDIT: 33% layoff today | ushakov wrote: | they raised $355M this year and like $600M last year | | https://www.crunchbase.com/organization/bolt-5/company_finan... | | how can a company burn money that quickly so they end up with | only 12-18 months of runway? | fdgsdfogijq wrote: | No idea. Confirmed the layoff number is 33% as of today. | Which is pretty aggressive, they must be hemorrhaging money. | matwood wrote: | I shaved a bit off our AWS bill and my CFO at the time asked | if it was worth my time. I asked him if he knew how you get a | huge AWS bill with no idea how to fix? A little bit at a | time. | | People get lazy because things seem good and let questionable | hires and other expenses slide by because why not, there's | plenty of money. | ushakov wrote: | see, that's why we don't use AWS | matwood wrote: | Toosh! | phphphphp wrote: | very broad strokes: money is raised to be spent. each round | gets you to the next, or you reach some measure of | sustainability before the money runs out -- layoffs like this | should be expected, regardless of the amount raised, if | there's a shift in conditions that indicate raising again in | 18 months isn't going to be easy. You can burn any amount of | money if you want to. | throway782 wrote: | unicornmama wrote: | Large technology companies won't hesitate to layoff employees | to protect their stock price. | aleksiy123 wrote: | I'm genuinely curious. Is there any other options? By this | point it's too late, right? And even if they played it safe | there is always some risk. | puranjay wrote: | Remember that debt fuelled stock buybacks were a huge reason | for propping up stock prices for these companies as well. | | Now that cheap debt is off the table, that buyback strategy | will have diminishing impact as well, forcing companies to | find other ways to keep stock up (such as cutting costs) | colinmhayes wrote: | I mean the established big tech companies are sitting on | mountains of cash. I suspect they'll start ramping up | buybacks even more aggressively due to what they see as | undervalued equity. | FooBarBizBazz wrote: | I don't think VC-backed startups typically do stock | buybacks? That's more of a Fortune 500 thing, AFAIK. | "Startups" (of whatever size) are always concerned about | the next funding round; I don't think they're going to burn | runway to prop up the share price. It's companies like GE | and IBM that do that, AFAIK. | puranjay wrote: | I was referring to the OP's comment that established | publicly traded tech companies too will be under pressure | to keep the stock price up and thus, aren't immune to | layoffs | schoolornot wrote: | Or their bonuses. | truthwhisperer wrote: | nrmitchi wrote: | 1) "Multiple rounds" is basically the worst possible way to do | layoffs. | | 2) Based on their recent fundraise (and assuming that they had | 0 dollars at that point), that's basically a burn rate of | 25-30M/m. I'm not sure I can event comprehend what that company | could be spending that much money on. | urthor wrote: | Agreed. | | The way to do layoffs is simple. You get managers to stack | rank the lot, then you get every single person with 30 or | more reports under them in a room. | | Then you do the whole layoff in one 5 hour meeting. | | Swing the axe and get it done in 2 days. | halfdan wrote: | Having 5000 employees will do that quickly. | datalopers wrote: | https://www.linkedin.com/company/bolt-com/ | | While not everyone has a linkedin, 900 employees seems like | a reasonably safe pre-layyoffs estimate? | polote wrote: | Among the 900 a lot of them are drivers at the Bolt | delivery company (So not the same one) | nrmitchi wrote: | From what I'm seeing they had ~550 employees as of the | beginning of this year (~4 months ago). This was up from | ~270 in Sept 2021 (~4 months prior). | | I would find it very hard to believe they have increased | their headcount by 900% (~4500 people) in 4 months. | throwaabolt wrote: | I am one of those let go today. It's especially bad, because they | seem to have messed up the invite templates. I received one to | the Town Hall meeting, even before Majus letter was published, | only to get the invitation cancelled and receive and invitation | to "Bolt Restructuring". What an emotional rollercoaster. | Extremely anxious about the future, as this is my first time | being laid off, especially in the current market. | | EDIT: I am doubly screwed because I signed up for the employee | stock option loan program... and I'm not sure what the bank will | want from me now that the stock price has tanked. | DevToRecruiter wrote: | I'm sorry you're going through this. I don't know what your | position is but I may be able to help you with the "finding a | new job" part of your anxiety. Please feel free to reach out to | me on twitter @devetorecruiter. Good luck with everything! | throwaabolt wrote: | thank you. can my wife's boyfriend contact you too? he is | part of the layoff as well. | nso95 wrote: | best of luck my friend | sibeliuss wrote: | I'm sorry to hear this. Did they offer severance pay? | cr3ative wrote: | Sorry to hear this, I hope everything works out for you. | respondo2134 wrote: | I work at Bold Commerce and we have some open positions for | software devs; take a day or two to process and then take a | look. I never realy figured out how so any companies were all | going to "own federated checkout" and we are definitely in a | different space, though a comparable size to Bolt. | stu2b50 wrote: | According to Ryan Brewslow, | | > There IS risk to the employee; they now have a real loan | outstanding and 100% personal recourse, so if the common stock | becomes less than exercise price, their personal assets are on | the hook | | So I suppose the bank will be after your personal assets? | phphphphp wrote: | Can you share more about the stock option loan program? If it | is what it sounds like, that program is unconscionable insanity | and whoever is encouraging employees to engage with it is | setting employees up for a world of hurt. | fdgsdfogijq wrote: | Half of the employees participated | tehlike wrote: | This has details | | https://twitter.com/theryanking/status/1493390167461224451 | bogomipz wrote: | Wow. After reading this I clicked on CEO Ryan Breslow's | Twitter profile pic and its him sitting in a yoga position | with his palms up turned. Between this loan idea, the self- | referencing to 4 day work and the yogi pose its like | something out of HBO's "Silicon Valley." | wavesounds wrote: | Why didn't they just give them RSUs instead of doing this | super complicated risky thing? | stu2b50 wrote: | More upside presumably, since if you do wait the time, | and the stock isn't underwater, then you can sell and be | taxed as long term capital gains. | | I really don't think that's a good gamble for an employee | to take, but oh well. | pastor_bob wrote: | They still hiring though? Lots of positions listed. 4 day work | week sounds tempting... | datalopers wrote: | Even better, word is once you've been there a while they'll | move you to the 0-day work week. | cheeze wrote: | > I know this will be difficult for us all, so I want to provide | clarity on what will happen next. For those directly impacted in | the US and Canada, our goal is to inform you within the next 30 | minutes when you will receive a calendar invite for an individual | or small sub-team "Bolt Restructuring" meeting. For those of you | who are staying on the Bolt team, later this morning you will | receive an invite to a Town Hall at 1pm PST. If you work outside | of the US and Canada, we will provide further clarity based on | the local laws and regulations over the next few weeks. | | I hate the use of things like "directly impacted" - feels like | such corporate speak to try to lessen the blow. Just be straight | about things. "Those who are being laid off" - don't hide behind | words. | aghilmort wrote: | upupandup wrote: | Spamming is NOT how you build trust/brand/customers | dang wrote: | Could you please stop using HN for promotion? You've been | posting these links way too much, it's crossed into spamming, | and we're getting complaints. | | https://news.ycombinator.com/newsguidelines.html | nilsbunger wrote: | This kind of message feels more authentic to me if you put the | big news in the first sentence, then cover logistics, then add | any context you want. Seems better than making people wade | through a lot of stuff about securing financial position, market | conditions, etc etc to learn if they are losing their job. | 88913527 wrote: | My guess is the author has little experience delivering | challenging information. | zucked wrote: | I said the same thing earlier this week about Klarna's | announcement. For those not in the know, it's called BLUF - | https://hbr.org/2016/11/how-to-write-email-with-military-pre... | | Don't waste people's time by burying the most important | information. You can receive a longform explanation, but not at | the expense of comprehension or speed of delivery. | aldebran wrote: | Edit: I'm going to leave the below message but wanted to | acknowledge that OP meant that the message could be more | authentic. I misread. | | How is this authentic? I was reading through and thinking how | it's mincing words and making it sound like everyone is going | to feel the same pain. | | "This is one of the hardest messages I've ever had to send." | Bad start. Why do CEOs make this about them? "Unfortunately, | this includes reducing the size of our workforce and parting | ways " "I know this will be difficult for us all" At least | acknowledge that it's going to be more difficult for people who | will lose their jobs. "But today, my focus is on our people. " | You're literally laying people off. First paragraph literally | puts employees as the last priority. "my top priority has been | to do what's best for Bolt's business, customers, and | employees" | | Stuff like this is business reality- just be really authentic. | Say it sucks but we've had to do this. Don't talk about how | hard it is for you or others who aren't directly impacted. It | may be hard but it's way harder for the ones losing their jobs | and cut the BS about focus being on people. It's clearly not. | zucked wrote: | You missed the takeaway of OP's message - OP is saying that | the message, as it was broadcast, was not authentic because | it was a long, meandering explanation, burying the part where | people are losing their jobs in the last sentence of the | third paragraph. | aldebran wrote: | I should read more closely. :) | | Thank you! | HomeGear wrote: | I think OP is saying, "This kind of message [would feel] more | authentic to me..." | eunos wrote: | Wait this is not Bolt the ride-sharing company? | daliusd wrote: | Yes, it is not the same company. Ride-sharing is bolt.eu, this | is bolt.com - some checkout company. bolt.eu is doing OK and | got some investment recently. | aabhay wrote: | I called it ages ago -- this company is an utter train wreck. I | am honestly ashamed of the entire industry for birthing and | fostering this basically fraudulent company. Its mistakes and | lies are compounding on themselves, creating awful outcomes for | its employees: | | - Company almost certainly juiced its usage numbers, potentially | by buying users to inflate its customers revenues, so it could | use those numbers to convince new customers - Used a single deal | with a large company (Forever 21) to sell VCs on the vision, | while under the hood that deal was clearly failing - ex CEO | picked twitter fights constantly, to the point of calling into | question whether he was even capable of focusing on execution - | Biggest competitor (Fast) exploded even before the market crash. | - Offered employees a four day work week while claiming rapid | exponential growth - Offered employees PERSONALLY guaranteed | loans to help them exercise the options - Raised at $11B | valuation with 100x forward revenue multiples. - Cash raised is | currently 6-8x revenue multiple, meaning valuation over next 12m | makes employee options worthless - I've never seen the technology | used on any website, and I am a frequent online shopper. | | Real talk, is this fin-tech's latest Theranos? | kumarm wrote: | wouldn't Fast be the Theranos even by your description? | | Bolt definitely has some explaining todo with employee stock | options but calling it Theranos seems little extreme. | nrmitchi wrote: | > I've never seen the technology used on any website, and I am | a frequent online shopper. | | I went down this rabbit hole last month. While not directly | related to the current topic, it might help explain why you've | "never seen it": | https://twitter.com/nrmitchi/status/1519174682863226880 | [deleted] | tkiolp4 wrote: | I just accepted an offer (contract is signed) 1 month ago. I | guess I need to start again looking for a job. | jdoliner wrote: | Why would the YC mob do this to Bolt? | | (/s) | flerchin wrote: | Eric Andre on HN! | dontreact wrote: | So is this the competitor to Fast, which also had a big round of | layoffs recently? | | My current understanding is that both of these businesses were | premised on the end of Amazon's one-click checkout patent. Is | this proving that to be a faulty premise? | rsstack wrote: | Fast didn't just do layoffs: Fast shut down completely. | tootie wrote: | Fast shut down completely. | bombcar wrote: | I have yet to understand how anything one click can beat | something like Apple Pay for sites you don't have an account | on. | lupire wrote: | The most important fact is buried on the middle of the third | paragraph, because the CEO is a coward. | mdoms wrote: ___________________________________________________________________ (page generated 2022-05-25 23:00 UTC)