In late May, employees of the fintech startup Bolt saw a message from their CEO on the company’s Slack. It warned them that “restructuring” was coming, and they should look out for a calendar invitation: One group would join a meeting with human resources, meaning they were being laid off, while another would go to a “town hall,” meaning they still had a job.
By the end of the day, 250 employees—nearly one-third of the company—had been let go. The mood was sour. Among the bitterness and anger, some employees simply felt confused. Bolt had just raised $355 million in venture capital, and investors had valued the startup at $11 billion. In April, Bolt reportedly spent $1.5 billion to acquire a crypto startup. Elsewhere, there were signs of a worsening market, but Bolt seemed to be doing fine; the founder bragged that the company was growing “at lightning speed.” An employee had even asked, in a recent town hall, if they should expect layoffs any time soon. The CEO, Maju Kuruvilla, had said no.
Those types of reassurances led some of Bolt’s employees to take out personal loans from the company in order to exercise their stock options. Bolt’s founder, Ryan Breslow, had announced the program publicly in February, describing it as “the most employee-friendly stock option program possible.” Bolt would let employees exercise their options early and potentially buy more equity in the startup by taking out interest-free loans from the company. At the time, Breslow said that over half of Bolt’s employees had chosen to take part in the program.
One of those employees, a software programmer who asked not to be named because he isn’t authorized to discuss internal company matters, took out a $100,000 loan to exercise his stock options once they vested. To him, Bolt “looked like a rocketship,” and he was willing to take the risk for the potential reward. Then, just months after taking the loan, he saw the “restructuring meeting” appear on his calendar. He was getting laid off.
Over the last several months, a number of startups have had to make cuts to their staff, leaving thousands of employees in the lurch. Some, Klarna and Peloton, had grown their staff feverishly during the pandemic, only to cut hundreds of jobs this spring. Venture capitalists have started turning off the fire hose of cash, and many startup CEOs are realizing they might not be able to get easy money anymore. In a blog post defending the layoffs, Kuruvilla described Bolt’s need to extend its runway and try to become profitable with the money it had already raised. To do that, it had to sacrifice some people.
For Bolt’s employees, though, it felt like whiplash. The startup had gone on a hiring tear at the end of 2021, adding hundreds of new people. Many of those new hires left jobs at big tech companies, like Amazon and Google, only to have their positions disappear less than a year later. “I came to a startup because I’m willing to swallow some risk,” said the Bolt software engineer. “Sometimes you take a risk, you do your best, and it doesn’t work out. But that’s not what this feels like.”