Start-up, prepare for the worst! | Paper jam news

At the best time to do business in Luxembourg, it was not uncommon to “close the bag” – to sign the contract or the deal – five minutes after closing the good table or the cabaret in which the final negotiations took place. Today, it’s time to “close the bag” on fundraising, observers have been warning for two months.

Between the end of state aid to avoid the collapse of the economy during the Covid pandemic and its confinements, the rampant inflation that central banks cannot contain and the economic uncertainties linked to the invasion of Ukraine by Russia, clouds and growth are hovering. forecasts are decreasing.

As a result, tech layoff announcements are accelerating and multiplying. More than 20,000 people have already lost their jobs in the United States alone, says Crunchbase in one count.

Getir draws a line below 4,500 employees

More recently, the Clubhouse admitted to cutting its payroll as part of a strategic shift after three employees announced their layoffs on Twitter. “We continue to recruit for many positions in engineering, product and design,” however, a spokesperson for the audio social network told Bloomberg.

Netflix has cut Tudum employees. Robinhood, whose workforce had dropped from 700 people in 2019 to 3,800 last year, saw its course lose 49% of its value and decided to eliminate duplicates to “gain efficiency”. PayPal laid off 83 people two weeks ago as part of a €120 million plan to save €260 million over time. The biggest layoff of 2022 so far came from Turkish delivery startup Getir, which laid off around 4,480 employees on May 25, just two months after raising $768 million in funding. Uber, Meta, Salesforce, Microsoft or Snap have also announced that they will make cuts in anticipation of a complicated second half of the year, according to Fortune.

Stories like this have been flooding the American media for two months now. There have been more than 130 layoff announcements since the start of the year, according to the Layoffs.fyi tracker, which is no more comprehensive than comparable tools from Crunchbase or Forbes. In May, layoffs increased 3.5 times compared to April. At the height of the Covid crisis, 50,000 jobs disappeared in April and May 2020.

In May of this year, one of Silicon Valley’s top investors, Y Combinator, wrote to its founders. “No one can predict how bad the economy is going to get, but things don’t look good,” the messenger said. “Whatever your fundraising ability, it is your responsibility to ensure your business survives if you are unable to raise funds for the next 24 months.”

Record vacancies in Luxembourg

This comes a week after SoftBank announced it would become much more selective in its investments after announcing a $27.7 billion loss on its Vision Fund investments for the fiscal year just ended.

Earlier this year, major companies such as Tiger Global and D1 Capital also said they were pulling out of late-stage investment talks.

It is difficult to get an idea of ​​the situation in Luxembourg: many start-ups have adopted a low profile during the crisis and since the end of the pandemic; still others are in more or less advanced discussions and confirm in thinly veiled terms that it is in their best interest to finalize their investment round quickly enough to take on what is often the biggest budget item: talent. On Thursday night at EY, on the occasion of the Luxembourg round of the Start-Up World Cup, the vast majority of the ten finalists did not hide the fact that they were in the process of completing a fundraiser – even if the amounts and situations are very different from each other – an issue particularly raised by one of the four members of the jury, Hans-Jürgen Schmitz, managing partner of Mangrove.

During the month of April, employers declared 4,134 vacancies for Adem, which corresponds to an increase of 40.8% compared to April 2021. The number of available vacancies stood at 12,684 on April 30, 2022. , a new absolute record, up 53% year on year.

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