The bird is laying off approximately 30 percent of its staff in response to the financial uncertainty of the coronavirus pandemic. The layoffs, which were first reported by TechCrunch, are the first major staff cuts by a scooter startup since the pandemic’s first hit, but they are likely not the last.
The news comes after most major scooter-sharing startups have said they would reduce or eliminate service in most major markets in response to the coronavirus pandemic. According to a memo from Bird CEO Travis VanderZanden, released by TechCrunch, the layoffs were necessary to ensure that the company remains solvent until the end of 2021.
Laid-off employees will receive four weeks of pay, three months of health coverage and an additional 12 months to exercise their stock options, TechCrunch reports.
With “shelter-in-place” orders, social distancing, and most people simply staying home and avoiding unnecessary travel, scooter companies are seeing a sharp drop in sales and demand. The timing of the pandemic also poses a unique challenge to the scooter industry that loses money and watches its business slow down in the winter and recover again when the weather turns warm.
Despite the pandemic, no startup has figured out how to make a profit without relying on tens of millions of dollars in venture capital investments.
Bird’s main rival, Lime, is also probably considering cutting workers. The San Francisco-based company laid off 14 percent of its workforce last January and left 12 markets, and a recent report in Bloomberg suggested that Lime is close to cutting up to 70 more jobs in response to the coronavirus. Another scooter company, Wheels, recently laid off 6 percent of its employees.