Yesterday, Patreon announced that it was laying off 13% of its workforce.
It’s not particularly surprising news. With most cities sheltering in place and so many people out of work, the tech industry has not been immune. A quick glance at layoffs.fyi will show that many startups are falling on hard times.
Most of the companies facing hard times are in industries most affected by Coronavirus shutdowns. Groupon, Yelp, Eventbrite, etc. Some of them are in unrelated industries
One of the things that makes this round of layoffs so strange, is last month Patreon wrote a blog post saying that
Average new patron growth across the US, UK, Canada, Germany, Australia, and Italy is up 36.2% compared to February
With so many people out of work and so many tech companies instituting hiring freezes, it really is a terrible time to be laid off. So many of these companies are facing going out of business, which is totally understandable. But then Patreon went and released the following statement:
Over the past six weeks, Patreon has experienced a significant influx of new creators launching on the platform along with increased financial support from both their new and existing patrons. In March alone, we onboarded 50,000 new creators to the platform of which the average income was 60% higher than previous months. This surge, along with years of continuous growth, has put Patreon in a strong financial position to help creators successfully manage their creative businesses during this challenging time.
Although the business is in a strong cash position, we want to ensure that we can continue to support creators for many years to come. It is unclear how long this economic uncertainty will last and therefore, to prepare accordingly, we have made the difficult decision to part ways with 13% of Patreon’s workforce. This decision was not made lightly and consisted of several other factors beyond the financial ones. Prior to the pandemic, we had completed an in-depth performance review cycle and deployed a new company strategy – both exercises highlighted the need for different skill sets moving forward.
It was this combination of economic uncertainty, performance reviews and a shift in strategy that prompted us to make this change. Patreon is now on a path to long-term success and the business will emerge from this layoff even stronger, both financially and strategically.
Which makes it sound like Patreon has plenty of money and isn’t at all in danger of going out of business. They just think they can make more money by laying folks off.
This is really the icing on the cake for me. In their official statement, they bring up performance reviews. Implying that the people they laid off were not top performers.
Why even mention this? It feels like a totally inappropriate insult aimed at people who have just gone through something terrible (you laying them off during a pandemic which has caused worldwide hiring freezes).
So the world is in a difficult place. Many people are out of work and struggling to find jobs. Companies are going out of business and bleeding cash. Patreon is lucky enough to be in an industry that is doing better than normal during this crisis. They are having record breaking months.
Despite all of this, they’ve decided to go ahead and fire a bunch of people during these tough times. On top of all of that, they also want you to know that the folks they laid off were not top performers and that’s why they are all being fired.
Stay classy, Patreon.
Written by Jon Kuperman living in Florida working on Adobe's Creative Cloud. You should follow him on Twitter