End of May, employees of the fintech startup Bolt saw a message from their CEO on the company’s Slack. It warned them that a “restructuring” was imminent and that they should look out for an invitation to the calendar: one group would attend a human resources meeting, meaning they would be fired, while another group would go to a ” town hall” would go, meaning she still had a job.
At the end of the day, 250 employees – almost a third of the company – had been laid off. The mood was sour. Under the bitterness and anger, some employees just 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 deteriorating market, but Bolt appeared to be doing well; the founder boasted that the company was growing”lightning fast† An employee had even asked in a recent town hall whether they could expect layoffs in the short term. The CEO, Maju Kuruvilla, had said no.
With such reassurances, some Bolt employees took out personal loans from the company to exercise their stock options. Bolt 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: more than half of Bolt’s employees had chosen to participate in the program.
One of those employees, a software programmer who declined to be named because he is not authorized to discuss internal business matters, took out a $100,000 loan to exercise his stock options once vested. To him, Bolt seemed “like a rocket ship,” and he was willing to take the risk for the potential reward. Then, just months after taking out the loan, he saw the “restructuring meeting” appear on his agenda. He was fired.
In recent months, a number of startups have had to cut their staff, leaving thousands of employees in the lurch. Some, Klarna and Peloton, had feverishly expanded their workforce during the pandemic, only to cut hundreds of jobs this spring. Venture capitalists have started to put out the fire hose of cash, and many startup CEOs are realizing that they may not have easy access to 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 a few people.
For Bolt’s employees, however, it felt like whiplash. The startup had a hiring rift in late 2021, adding hundreds of new people. Many of those new hires left their jobs at major tech companies, such as Amazon and Google, only to have their positions disappear less than a year later. “I joined a startup because I’m willing to take some risk,” said Bolt’s software engineer. “Sometimes you take a risk, you try your best and it doesn’t work out. But it doesn’t feel that way.”
