Once valued at $11 billion, the San Francisco has cut more than half of its headcount since May. The first round of layoffs cut an estimated 250 employees—then approximately one-third of its workforce—while the second round November didn’t garner much fanfare.
A Bolt spokesperson confirmed the recent layoffs to Sourcing Journal, but did not confirm the number of jobs eliminated, or which departments the cuts affected.
“Bolt is focused on the long-term success of our business and our customers, and we truly believe we will power the next generation of growth for independent retailers,” the spokesperson said. “As we concentrate on strengthening our core products, we regretfully had to make the difficult decision to restructure our teams and part ways with some of our talented employees. We’re extremely grateful for everyone’s contributions.”
The most recent cuts targeted employees with poor performance ratings, according to The Information, although performance was not the basis for all the cuts.
The Information report indicated that in an all-hands meeting Tuesday, Bolt CEO Maju Kuruvilla said that “quite a few” of the company’s bets, including partnerships, new products and acquisitions, hadn’t worked out as anticipated. He also said that proposed deals with some big retailers had been delayed. Alongside that, Kuruvilla expressed that Bolt’s headcount was simply too high relative to the company’s growth, according to the report.
According to the Information report, Bolt is projecting 2023 revenue between $35 million and $40 million, a rather modest sum for a business that’s raised more than $1 billion from investors. On the positive side, the company’s cash burn has decreased in kind from a year ago, dropping to $6 million per month instead of $20 million per month.
The May layoffs came in the aftermath of a lawsuit levied by Brooks Brothers and Reebok parent Authentic Brands Group (ABG), which alleged that Bolt failed to live up to its promises in deploying several technologies across Forever 21 and Lucky Brand. ABG claimed that Forever 21 lost as much as $150 million in sales due to the firm’s botched implementation.
The companies settled the lawsuit out of court in July, with ABG reportedly getting a less than 5 percent stake ownership in the fintech. The ownership stake was framed in their initial 2020 deal as contingent on the brand management firm’s ability to drive $750 million in gross merchandise value (GMV) via Bolt’s technologies by October 2022.
Bolt underwent a rebrand of sorts to kick off 2023, changing its logo and focusing more on long-term customer loyalty as its top brand proposition, with Kuruvilla referring to the company as “The New Bolt” in a blog post.
“At Bolt, we’re focused on three things in 2023,” Kuruvilla wrote. “1) Creating more trusted shopping destinations by empowering independent merchants; 2) Turning guest shoppers into lifetime customers; 3) Building the world’s first ubiquitous and universal commerce payment and identity network.”
Since the ABG suit and the first round of layoffs, Bolt has kept a low profile compared to when it attempted to acquire a cryptocurrency company. But its struggles have also come amid larger concerns regarding the global economy, high inflation, a potential recession and lower consumer spending.
This environment has impacted Big Tech firms, retailers and supply chain businesses alike, with Amazon, Google, Meta and Microsoft cutting more than 50,000 jobs between the four companies. Salesforce reduced its headcount by 7,000, while Twitter and Stripe have also put thousands on the chopping block.
Bolt was one of the first tech companies that the 2022 market selloff majorly impacted from a labor perspective. The other, also shedding staff in May last year, was buy now, pay later giant Klarna, which laid off 700 employees, or 10 percent of the workforce.
One of the hottest names in supply chain technology, Flexport, recently laid off approximately 20 percent of its global workforce, or roughly 640 employees, after being valued at more than $8 billion just a year prior.
On the retail front, many of the companies Bolt would be going after to implement single-sign-on checkout are laying off employees as well. This list includes a who’s who of sellers and brands including Walmart, Nordstrom, H&M Group, Gap Inc., VF Corp., Saks.com, Allbirds, Bed Bath & Beyond and more.