Apr 9, 2020 - Economy & Business

The coronavirus' domino effect on startup layoffs

Illustration: Sarah Grillo/Axios

As the coronavirus continues to paralyze much of American daily life, startups that aren’t directly affected by the sudden shift in consumer behavior are now laying off employees too, worried that their products and services won't be in demand anytime soon.

Why it matters: Startups create a lot of jobs — in 2015 alone they created 2.5 million — and their pain could make a recovery from the virus downturn harder.

Driving the news: More young companies are announcing cutbacks, including buzzy retailers like luggage maker Away and software providers like Toast, which in February announced $400 million in new funding.

Others making cuts as the economic ripples gain momentum include:

Between the lines: The U.S. expected that restaurants, stores, hotels, airlines and other businesses would suffer, but now we’re seeing companies whose revenue depends on these businesses suffer.

  • If people aren't booking flights for vacations or work trips, they don’t need to buy luggage.
  • If restaurants are shuttering or offering takeout only, they’re not spending money on software and tools.
  • With most workers no longer reporting to offices right now, their employers aren’t ordering catered lunches or other office-related services.

Moreover, some startups are taking precautionary cuts as the fog over the economy makes it hard to predict the future.

  • Others, like direct-to-consumer lingerie-maker ThirdLove and beverage company Iris Nova, are trimming staff as consumers decrease their spending or shift it elsewhere.

The big picture: Similar dynamics are playing out beyond startup land. News companies — especially local newspapers — are cutting staff as local businesses stop purchasing ads. Travel agencies are taking a hit, as are ticketing and event businesses.

Go deeper: The coronavirus dip is worse than anything startups predicted

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U.S. cities crack down on protests against police brutality

Photo: Megan Jelinger/Anadolu Agency via Getty Images

Major U.S. cities have implemented curfews and called on National Guard to mobilize as thousands of demonstrators gather across the nation to continue protesting the death of George Floyd.

The state of play: Hundreds have already been arrested as tensions continue to rise between protesters and local governments. Protesters are setting police cars on fire as freeways remain blocked and windows are shattered, per the Washington Post. Law enforcement officials are using tear gas and rubber bullets to try to disperse crowds and send protesters home.

Trump to invite Russia and other non-member G7 countries to summit

President Trump at Cape Canaveral, Florida, on Saturday. Photo: Saul Martinez/Getty Images

President Trump told reporters on Saturday evening he would postpone the G7 summit to September and expand the meeting to more nations that are not members of the Group of 7.

Details: Trump said he would invite Russia, South Korea, Australia and India to the summit, according to a pool report. "I don’t feel that as a G7 it properly represents what’s going on in the world. It’s a very outdated group of countries," he said.

Updated 1 hour ago - Politics & Policy

George Floyd protests: What you need to know

Thousands of protesters march in Denver, Colorado, on May 30. Photo: Michael Ciaglo/Getty Images)

Curfews are being imposed in Portland, Oregon, and Cincinnati, while the governors of Georgia, Kentucky, Ohio and Texas activated the National Guard following unrest in the states, per AP.

The big picture: Floyd's fatal run-in with police is the latest reminder of the disparities between black and white communities in the U.S. and comes as African Americans grapple with higher death rates from the coronavirus and higher unemployment from trying to stem its spread.