Techstars is laying off 17%, ending its J.P. Morgan-backed programs

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Techstars Tension between JPM and Techstars

Image Credits: Bryce Durbin/TechCrunch

Techstars is laying off 17% of its workforce and will end its $80 million J.P. Morgan-backed AdvancingCities program once the fund is completely deployed at the end of this year, TechCrunch has learned.

The AdvancingCities program, which launched in 2022, saw the launch of accelerator programs across the nation in cities like Oakland, New York, Miami and Washington, D.C. with the goal of backing more diverse founders. 

J.P. Morgan sponsored the program with a commitment through December, but the relationship between the bank and Techstars soured almost immediately, as TechCrunch previously reported. The bank was supposed to commit to continuing the program last summer so Techstars could start fundraising for another round with the hope of deploying capital from the second round in 2025. But it didn’t commit by that earlier deadline. As of our earlier report, the fate of around 20 Techstars employees who worked on the program was unclear.

“In 2022, J.P. Morgan announced the $80MM Advancing Cities Fund, raised as a private placement to invest in a Techstars accelerator program focused on advancing equitable access to funding among diverse founders across the U.S,” a J.P Morgan spokesperson told TechCrunch. “The fund is expected to be fully deployed by the end of this year, as planned. JPMorganChase remains committed to supporting across the country through the expansion of its diverse manager network, private investments platform and engagement capabilities.”

The news that the program was officially shut down was reported on Wednesday by The Information.

In an email about the layoffs, Techstars co-founder and CEO David Cohen told staff that the startup accelerator “overbuilt and over hired.” He said that most of the layoffs would come from engineering, support services and those working on sales and partnerships. He promised that those running most accelerator programs would not be impacted with the exception of the J.P. Morgan programs, specifically the AdvancingCities program. 

The news comes during a transformative year for Techstars. Techstars’ now-former CEO Maëlle Gavet stepped down in May, with Cohen stepping back into the role upon her departure. Wednesday’s layoff also follows a 7% headcount reduction in January, as TechCrunch previously reported. 

Techstars’ strategy under Gavet was to scale into more programs and back more startups, but it was met with criticism from those in the investment community as the organization began earlier this year to restructure itself. Cohen somewhat addressed the criticisms in that email to staff today, saying that the firm would now “stop focusing on scaling and shift all of our focus to being better for founders each and every day.” 

Techstars declined further comment but pointed to Cohen’s email which it published on its website.

Note: This story was updated to add a statement from J.P. Morgan.

Techstars is laying off 17%, ending its J.P. Morgan-backed programs

by with No Comment Tech

Techstars Tension between JPM and Techstars

Image Credits: Bryce Durbin/TechCrunch

Techstars is laying off 17% of its workforce and will end its $80 million J.P. Morgan-backed AdvancingCities program once the fund is completely deployed at the end of this year, TechCrunch has learned.

The AdvancingCities program, which launched in 2022, saw the launch of accelerator programs across the nation in cities like Oakland, New York, Miami and Washington, D.C. with the goal of backing more diverse founders. 

J.P. Morgan sponsored the program with a commitment through December, but the relationship between the bank and Techstars soured almost immediately, as TechCrunch previously reported. The bank was supposed to commit to continuing the program last summer so Techstars could start fundraising for another round with the hope of deploying capital from the second round in 2025. But it didn’t commit by that earlier deadline. As of our earlier report, the fate of around 20 Techstars employees who worked on the program was unclear.

“In 2022, J.P. Morgan announced the $80MM Advancing Cities Fund, raised as a private placement to invest in a Techstars accelerator program focused on advancing equitable access to funding among diverse founders across the U.S,” a J.P Morgan spokesperson told TechCrunch. “The fund is expected to be fully deployed by the end of this year, as planned. JPMorganChase remains committed to supporting across the country through the expansion of its diverse manager network, private investments platform and engagement capabilities.”

The news that the program was officially shut down was reported on Wednesday by The Information.

In an email about the layoffs, Techstars co-founder and CEO David Cohen told staff that the startup accelerator “overbuilt and over hired.” He said that most of the layoffs would come from engineering, support services and those working on sales and partnerships. He promised that those running most accelerator programs would not be impacted with the exception of the J.P. Morgan programs, specifically the AdvancingCities program. 

The news comes during a transformative year for Techstars. Techstars’ now-former CEO Maëlle Gavet stepped down in May, with Cohen stepping back into the role upon her departure. Wednesday’s layoff also follows a 7% headcount reduction in January, as TechCrunch previously reported. 

Techstars’ strategy under Gavet was to scale into more programs and back more startups, but it was met with criticism from those in the investment community as the organization began earlier this year to restructure itself. Cohen somewhat addressed the criticisms in that email to staff today, saying that the firm would now “stop focusing on scaling and shift all of our focus to being better for founders each and every day.” 

Techstars declined further comment but pointed to Cohen’s email which it published on its website.

Twitch is laying off another 500 employees

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Twitch logo

Image Credits: MARTIN BUREAU / AFP / Getty Images

Another round of layoffs is hitting Twitch.

The Amazon-owned livestreaming platform will cut 35% of its staff, or roughly 500 employees, Bloomberg reported Tuesday.

Twitch publicly confirmed the layoffs in a blog post on Wednesday, which included a copy of the email that was sent to staff informing them of the cuts. In the email, CEO Dan Clancy said he was “disappointed” that the news of the layoffs was “leaked” before Twitch informed employees. He added that the company had planned to tell them on Wednesday morning, and was “unfortunately not able to accelerate the timeline.” He also stated that Twitch had paid out over $1 billion to streamers last year, but the company’s size didn’t match its growth.

“Over the last year, we’ve been working to build a more sustainable business so that Twitch will be here for the long run and throughout the year we have cut costs and made many decisions to be more efficient,” Clancy continued. “Unfortunately, despite these efforts, it has become clear that our organization is still meaningfully larger than it needs to be given the size of our business … As with many other companies in the tech space, we are now sizing our organization based upon the current scale of our business and conservative predictions of how we expect to grow in the future.”

Twitch did not immediately respond to TechCrunch’s request for comment.

It’s the latest blow for the already beleaguered company, which cut hundreds of jobs last year amid leadership changes, rising operating costs and community discontent. Shortly after Twitch co-founder and longtime CEO Emmett Shear handed the reigns to Clancy, the company laid off 400 employees. Amazon cut another 180 jobs late last year when it shut down its Crown channel, the Amazon-run Twitch programming, and shuttered its Game Growth group, which was supposed to help gaming creators market themselves.

Twitch also recently announced plans to shut down service in South Korea — one of the largest esports markets in the world — over “prohibitively expensive” network fees. In a blog post announcing the closure, Clancy wrote that the company had been operating at a “significant loss” in Korea, and that there was “no path forward” to run sustainably.

Despite its popularity — the platform’s usership has skyrocketed since pandemic lockdowns several years ago — Twitch still struggles to turn a profit. Its pivot to prioritizing ad revenue, which has been a point of contention among viewers and streamers, has not been fruitful; Bloomberg reports that the company is still unprofitable nearly a decade after Amazon acquired it. Several executives left Twitch in December, including its chief revenue officer.

Twitch faces steep operating costs to support livestream content at such a large scale. In a 2022 blog post, Clancy stated that each high-volume streamer on Twitch costs the company about $1,000 per month, citing Amazon Web Service’s interactive video rates.

“Delivering high definition, low latency, always available live video to nearly every corner of the world is expensive,” Clancy wrote.

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Twitch logo

Twitch is laying off another 500 employees

by with No Comment Tech

Twitch logo

Image Credits: MARTIN BUREAU / AFP / Getty Images

Another round of layoffs is hitting Twitch.

The Amazon-owned livestreaming platform will cut 35% of its staff, or roughly 500 employees, Bloomberg reported Tuesday.

Twitch publicly confirmed the layoffs in a blog post on Wednesday, which included a copy of the email that was sent to staff informing them of the cuts. In the email, CEO Dan Clancy said he was “disappointed” that the news of the layoffs was “leaked” before Twitch informed employees. He added that the company had planned to tell them on Wednesday morning, and was “unfortunately not able to accelerate the timeline.” He also stated that Twitch had paid out over $1 billion to streamers last year, but the company’s size didn’t match its growth.

“Over the last year, we’ve been working to build a more sustainable business so that Twitch will be here for the long run and throughout the year we have cut costs and made many decisions to be more efficient,” Clancy continued. “Unfortunately, despite these efforts, it has become clear that our organization is still meaningfully larger than it needs to be given the size of our business … As with many other companies in the tech space, we are now sizing our organization based upon the current scale of our business and conservative predictions of how we expect to grow in the future.”

Twitch did not immediately respond to TechCrunch’s request for comment.

It’s the latest blow for the already beleaguered company, which cut hundreds of jobs last year amid leadership changes, rising operating costs and community discontent. Shortly after Twitch co-founder and longtime CEO Emmett Shear handed the reigns to Clancy, the company laid off 400 employees. Amazon cut another 180 jobs late last year when it shut down its Crown channel, the Amazon-run Twitch programming, and shuttered its Game Growth group, which was supposed to help gaming creators market themselves.

Twitch also recently announced plans to shut down service in South Korea — one of the largest esports markets in the world — over “prohibitively expensive” network fees. In a blog post announcing the closure, Clancy wrote that the company had been operating at a “significant loss” in Korea, and that there was “no path forward” to run sustainably.

Despite its popularity — the platform’s usership has skyrocketed since pandemic lockdowns several years ago — Twitch still struggles to turn a profit. Its pivot to prioritizing ad revenue, which has been a point of contention among viewers and streamers, has not been fruitful; Bloomberg reports that the company is still unprofitable nearly a decade after Amazon acquired it. Several executives left Twitch in December, including its chief revenue officer.

Twitch faces steep operating costs to support livestream content at such a large scale. In a 2022 blog post, Clancy stated that each high-volume streamer on Twitch costs the company about $1,000 per month, citing Amazon Web Service’s interactive video rates.

“Delivering high definition, low latency, always available live video to nearly every corner of the world is expensive,” Clancy wrote.

Twitch to shut down in Korea over ‘prohibitively expensive’ network fees

Twitch’s money guy talks about the revenue split controversy and its monetization long game

proofpoint logo on a phone next to a laptop on a green desk

Security giant Proofpoint is laying off 280 employees, about 6% of its workforce

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proofpoint logo on a phone next to a laptop on a green desk

Image Credits: Rafael Henrique/SOPA Images/LightRocket / Getty Images

Proofpoint is laying off about 6% of its global workforce, or 280 employees, the company confirmed to TechCrunch.

“This decision was not taken lightly, and it is deeply rooted in our forward-looking company strategy of aligning our investments and hiring to our strategic priorities, expanding our operational footprint by leveraging a global talent pool, and streamlining our organization with fewer management layers,” noted the company in a statement provided by Proofpoint spokesperson Jennifer Duffourg.

Proofpoint said about half of the positions it eliminated will be moved to its global centers in Ireland and Argentina. Proofpoint added that it expects to end the year with “a similar headcount” to the beginning of this year, without providing specifics.

The layoffs were first reported by Calcalist.

Duffourg declined to comment further when asked by TechCrunch what proportion of employees in management were affected by the layoffs.

Proofpoint’s leadership page — which has no women — says the company has about 4,500 employees.

Private equity giant Thoma Bravo acquired Proofpoint in a $12.3 billion cash deal in 2021. Prior to the close of the deal, Proofpoint reported that it made $1.05 billion in revenue during 2020, up 18% on the previous year. Thoma Bravo, one of the wealthiest private equity firms in the world, says it has $134 billion in assets under its management as of September 2023.

Proofpoint’s spokesperson declined to say if the company is currently profitable.

Thoma Bravo buys cybersecurity vendor Proofpoint for $12.3B in cash

PlayStation 5

Sony is laying off 900 employees from its PlayStation unit

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PlayStation 5

Image Credits: Akio Kon / Bloomberg / Getty Images

Sony is laying off around 900 employees in its PlayStation division, the company announced on Tuesday. The cuts will impact 8% of the division’s global workforce, as Sony becomes the latest company to announce major cuts in recent weeks and months. Sony also announced that it will be closing its London Studio in the U.K.

“After careful consideration and many leadership discussions over several months, it has become clear changes need to be made to continue to grow the business and develop the company,” said PlayStation chief Jim Ryan in a note to employees. “We had to step back, look at our business holistically, and move forward focusing on the long-term sustainability of the company and delivering the best experiences possible for our community.”

In a separate post, head of PlayStation Studios Hermen Hulst said the company’s Insomniac Games, Naughty Dog, Guerrilla and Firesprite studios will be impacted, and that the cuts will affect employees across the Americas, Japan and EMEA and APAC regions. Hulst says some ongoing projects, in various stages of development, will not be moving forward.

The layoffs come two weeks after Sony cut its sales forecast for the PlayStation 5 after warning of decreasing demand. Sony said it expects to sell 21 million units of the console in its fiscal year, down from its previous forecast of 25 million consoles. Sony shares plunged following the news.

Sony isn’t the only company in the gaming business to announce recent job cuts. Last month, Microsoft laid off 1,900 Activision Blizzard and Xbox employees and Unity laid off 25% of its workforce. Numerous companies, including Google, Snapchat, eBay, PayPal, DocuSign, Okta, Block, Discord, Twitch and Duolingo have all conducted sizable layoffs in just the past month.