Friday, April 10, 2020

Mass layoffs at Yelp, Eventbrite show coronavirus’ damage to SF tech

Mass layoffs at Yelp, Eventbrite show coronavirus’ damage to SF tech

Roland Li April 9, 2020 Updated: April 9, 2020 5:15 p.m.

1of3Employees work at various spaces around the building at the Yelp headquarters in San Francisco in 2018.Photo: Amy Osborne / Special To The Chronicle 2018
2of3Yelp CEO Jeremy Stoppelman poses at his company’s headquarters in San Francisco in 2014.Photo: Eric Risberg / Associated Press 2014
3of3Eventbrite Chairman Kevin Hartz, center, is welcomed by Specialist Peter Giacchi, left, as he and company CEO Julia Hartz, start Eventbrite's IPO process on the floor of the New York Stock Exchange, Thursday, Sept. 20, 2018.Photo: Richard Drew / Associated Press 2018

The coronavirus is bruising San Francisco’s tech industry.

Yelp is laying off 1,000 workers and furloughing 1,100 more, roughly a third of its staff, the company said Thursday. Eventbrite laid off 450 employees, or nearly half of its workforce, on Wednesday.

Airbnb, which planned to go public this year, raised $1 billion this week as bookings have plunged worldwide. The company enacted a hiring freeze for most jobs and paused marketing in an effort to save $800 million this year, tech news website the Information reported last month.

The three companies, which are headquartered in the South of Market, are reliant on industries that have been devastated by the coronavirus: live events, retail, restaurants and travel. In contrast, major companies like Salesforce and Google are still hiring rapidly and donating millions of dollars for aid.

Smaller companies are more vulnerable to an economic downturn and other challenges from coronavirus compared to the tech giants, Colin Yasukochi, executive director of brokerage CBRE’s Tech Insights Center, previously told The Chronicle. More economic pain could widen the gap between the biggest tech companies and startups that are struggling.

Shelter-in-place orders have shuttered most small businesses in the Bay Area and around the world, which has badly hurt Yelp.

“Yelp connects people with these great local businesses, and as their worlds have been turned upside down, these businesses are understandably forced to pause or reduce spending on the products and services that Yelp provides,” Yelp CEO Jeremy Stoppelman wrote in an internal company email Thursday. “To help Yelp get through this period of great uncertainty, we have had to make some incredibly hard decisions to reduce our operating costs.”

The company expects to spend $8 million to $10 million on severance and furloughing costs. Executives are taking a 30% pay cut, and Stoppelman will not receive a salary this year.

No comments:

Post a Comment