SoftBank-backed companies laid off more than 16,800 people in 2020 as the pandemic ravages startups

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SoftBank-backed companies are laying off thousands of employees globally as they struggle to find paths to profitability.
In the first full week of 2020, four companies – Oyo, Rappi, Getaround, and Zume – laid off a combined 2,600 employees. 

In the last year, other SoftBank-backed companies including WeWork, Uber, Wag, and Fair have also cut their ranks dramatically. 
SoftBank also saw significant executive turnover in the beginning of the year.
If you work at a SoftBank-backed company, Business Insider wants to hear from you. Get in touch on secure messaging app Signal using a non-work phone: 646 768 1627. 

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Flush with billions of SoftBank dollars, startups ranging from a robot pizza maker to a low-cost hotel operator have swelled their ranks in recent years. 

Now, as the Japanese investor faces a reckoning about how the companies will become profitable, layoffs are hitting the companies across the world, and even affecting the investor itself. 

In the first full week of 2020, four of SoftBank’s companies cut a combined 2,600 employees, according to media reports from Business Insider and other outlets. More layoffs would come in the following months, bringing the 2020 cuts – not including furloughs – to more than 16,800. 

Those layoffs follow major cuts in the fourth quarter at companies including WeWork, Uber, Wag, and Fair. In total, SoftBank-backed companies have cut at least 18,000 jobs in the last year, by Business Insider’s count.

Because SoftBank’s portfolio is global, with various reporting requirements by location and differing degrees of transparency, that number is likely a vast undercount. 

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That figure doesn’t include groups of employees like WeWork’s 1,000 janitorial staff in the US and Canada who are being outsourced. Trouble at these companies has knock-on effects since many work with contractors, such as the people that walk dogs for Wag, who enjoy fewer labor protections than full-time employees. 

See more: Masa Son is facing one of his biggest challenges yet as the SoftBank Vision Fund racks up billions in losses. 12 insiders reveal where it all went wrong.

In the wake of major losses, SoftBank is thinking more about portfolio companies’ path to profitability. Ahead of investing in Alto Pharmacy through its second mega-fund, SoftBank emphasized profitability in its due diligence process, CEO Matt Gamache-Asselin told Business Insider in early February. 

“Really from the beginning, I was surprised by the level of depth and rigor that got put on profitability and economics,” he said. 

A SoftBank spokesman did not respond to requests for comment. 

Business Insider is tracking the layoffs and what’s happening at each company. The numbers are based on our own reporting as well as media reports elsewhere. We will continue to update this page as news evolves.

If you currently work for or were previously employed at a SoftBank-backed company and want to get in touch, use encrypted app Signal to text or call this reporter at 646 768 1627. You can also contact Business Insider securely via SecureDrop.

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Source:: Businessinsider – Finance


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