Sign up for our daily briefing
Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.
Catch up on the day's biggest business stories
Subscribe to Axios Closer for insights into the day’s business news and trends and why they matter
Stay on top of the latest market trends
Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.
Sports news worthy of your time
Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.
Tech news worthy of your time
Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.
Get the inside stories
Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Want a daily digest of the top Denver news?
Get a daily digest of the most important stories affecting your hometown with Axios Denver
Want a daily digest of the top Des Moines news?
Get a daily digest of the most important stories affecting your hometown with Axios Des Moines
Want a daily digest of the top Twin Cities news?
Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities
Want a daily digest of the top Tampa Bay news?
Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay
Want a daily digest of the top Charlotte news?
Get a daily digest of the most important stories affecting your hometown with Axios Charlotte
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:
- AngelList (from its jobs board business)
- ZipRecruiter (a jobs marketplace)
- EZCater (corporate catering)
- Eden (office management)
- SpotHero (public parking)
- Thumbtack (a small business marketplace)
- Kabbage (small business lending)
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