Bellevue, Wash.-based cell market operator OfferUp is shedding about 19% of its workers, becoming a member of a rising checklist of tech corporations slashing prices amid a shaky financial system.
“We grew headcount quickly over the previous few years — at a fee that outpaced income development,” OfferUp CEO Todd Dunlap wrote in an electronic mail to staff Tuesday.
OfferUp didn’t present particulars on complete headcount. The corporate has simply shy of 500 staff listed on LinkedIn.
Practically 800 tech corporations have laid off employees in 2022, together with many with a presence within the Pacific Northwest. Amazon is reportedly shedding 10,000 company and tech jobs; Seattle-area startups comparable to Convoy and Flyhomes additionally just lately introduced cuts.
OfferUp nonetheless had “a number of years of runway” earlier than deciding to chop workers, Dunlap wrote within the memo. However OfferUp shouldn’t be hitting its income development projections for 2022 and management concluded that “our present value construction is stopping us from reaching our targets.”
Dunlap, a former chief at Microsoft and Reserving.com, took the CEO reins at OfferUp final yr. He changed founder Nick Huzar, who stays on the firm as a board director.
Based in 2011, OfferUp competes in opposition to Craigslist, eBay, Fb and different marketplaces the place customers purchase and promote items. The corporate has 56 million patrons and sellers on its platform and is presently ranked No. 6 on the Startup 200, our index of Pacific Northwest startups.
OfferUp raised $120 million in March 2020 and bought rival Letgo. The corporate is amongst an elite group of Seattle-area unicorns with a valuation of greater than $1 billion.
Earlier this yr OfferUp added job listings with the launch of OfferUp Jobs within the firm’s cell app.
Learn Dunlap’s full memo beneath:
OfferUp Group:
In the present day is a troublesome day for OfferUp and its staff, as I simply met with a few of our associates and colleagues to allow them to know that they’re leaving OfferUp. This was a troublesome determination and it’ll have important impacts on the people who find themselves leaving, those that are staying, and the Firm, so I wished to take a couple of minutes to share with you the explanations for the choice and why I believe it’s vital for OfferUp’s long-term success.
Earlier than I speak in regards to the future, I wish to acknowledge our colleagues who’re leaving. They’re valued contributors to OfferUp who had the misfortune to be in roles that aren’t required for our 2023 plans. We are going to miss them and I encourage you to achieve out to them. I would like you to know that we’re doing all the things we are able to to ease this transition. For individuals who are leaving immediately, we’re providing:
- Severance – We wished our colleagues to have pay by means of the vacations and into the brand new yr, so all departing staff will obtain at the very least 8 weeks of pay.
- Healthcare – To reduce the burden of healthcare prices, we are going to cowl the worker portion of COBRA by means of January 2023.
- Outplacement Companies – To assist our departing colleagues transition into new roles, all of them may have entry to profession providers by means of an organization that focuses on profession transition and job placement providers.
- Inventory Choices – To offer everybody a greater alternative to share in our future success, we’re asking the Board to approve an extension of the expiration of departing staff’ vested inventory choices from the usual 3 months to 12 months.
- Laptops – In an effort to empower individuals to seek out their subsequent job, we’re permitting everybody to maintain their OfferUp-issued computer systems for free of charge.
We want our colleagues effectively and we hope to cross paths with them once more sooner or later. Please be a part of me in thanking them for his or her contributions to OfferUp.
Now I’d like to speak about how we got here to this determination.
Many different corporations at our stage are presently shedding staff and chopping prices as a result of they face the opportunity of going out of enterprise in the event that they don’t. Luckily, we’re not in that place and had a number of years of runway earlier than the adjustments immediately. Having a stronger monetary place is a profit, however it will possibly additionally enable management to keep away from onerous selections which are vital.
We grew headcount quickly over the previous few years – at a fee that outpaced income development. I had hoped that our 2022 working plan would generate sufficient income development to permit us to develop into our present value construction. Nonetheless, by mid-year, it turned clear that we’d miss our income development projections. The administration workforce and the Board had plenty of strategic discussions, each internally and with advisors, about tips on how to proceed. These conversations all the time ended with the identical conclusion – our present value construction is stopping us from reaching our targets.
We’ve constructed a big and lively market that serves tens of thousands and thousands of customers each month, however we’re not but at a income scale that permits us to thrive with out continued development. At our stage, we have to display at the very least 2 or 3 of the next elements:
- Important consumer development,
- Important income development,
- Profitability, and
- Growth of our market alternative that can enable us to maintain development and profitability effectively into the long run.
Our value construction has not allowed us to make as a lot progress on these elements as we must always have. As one instance, to avoid wasting bills, we’ve principally relied on natural development in recent times. We spent a fraction of what different marketplaces spend on advertising and marketing, lacking the chance to additional elevate consciousness of OfferUp. Profitable advertising and marketing assessments earlier this yr and rising income per consumer give us some sign that we are able to spend extra to carry customers onto our platform in a fashion that might be sustainable and worthwhile. Nonetheless, that funding was not doable with our value construction. There are different ways in which we hope to do extra by shifting our spending that I’ll share as we talk about extra over the approaching weeks.
I’m enthusiastic in regards to the 2023 plan we simply previewed with the Board, and I look ahead to sharing particulars with all of you within the coming weeks. It is a plan that’s each attainable and thrilling, and it is just doable due to the extra capital accessible because of immediately’s determination. With a leaner, nimbler Firm in 2023, we intend to:
- Develop options for our promoting merchandise that can enable us to raised monetize our market exercise – ideally in a method that improves the expertise for each advertisers and customers.
- Proceed to broaden our choices into adjoining areas – most notably by constructing on the early success of the roles market we launched this yr. We’ve seen actually sturdy alerts on this effort and we expect it may be an enormous a part of the way forward for OfferUp and open the door to extra growth alternatives.
- Considerably enhance our consumer development advertising and marketing funding to drive extra customers, income, and revenue.
- Supply extra instruments and providers to assist the quite a few sellers on our platform who’re already efficiently utilizing OfferUp to allow their very own enterprise – whether or not they be an area service provider, a regional retail chain, or a person making additional money as a “facet hustle”.
- Proceed funding within the belief and security initiatives which have made OfferUp the most secure, most trusted native market.
- Grow to be EBITDA worthwhile by This fall 2023.
Our 2023 plan may be very targeted on our greatest alternatives. If we obtain these plans, we may have many extra choices than we now have immediately. It’s essential that everybody who continues with OfferUp has the chance to profit from these elevated choices, so I’ll be sharing some plans we now have to share Firm success with every of you.
The management workforce will host a city corridor dialogue and listening session this Friday. Extra particulars on the place to submit your questions for the city corridor will come later immediately.
I wish to shut by thanking you to your continued assist of OfferUp and assuring you that I’ll do all I can to make it possible for assist is appropriately rewarded. For these of you who don’t have any pressing duties immediately, please be at liberty to take the remainder of the day to course of immediately’s information.
Todd
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