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Wednesday, February 1, 2023

Linktree is the latest tech startup to cut jobs and lose 17% of its global workforce

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Link-in-bio startup Linktree is cutting approximately 50 jobs from its global workforce, reducing its workforce by 17%.

Co-founder Alex Zaccaria told staff in an email that “the news I have to share with you all today is harder than anything I’ve ever done”.

“Our people have built Linktree into what it is today: the trust of millions of people around the world. I am devastated that I have to say goodbye to some great teammates today and I want to do everything I can to support them,” he said.

Founded six years ago, Linktree went from being an afterthought for music customers to one of the world’s most popular website destinations worldwide, with 1.2 billion monthly visitors and 25 million users. It is a tool to optimize the internet presence of a celebrity, business or blogger, manage content on social media sites such as Instagram, Facebook, YouTube and Twitch, send viewers to other sites or an e-commerce store.

“To meet the needs of our users over the past year, we’ve scaled many of our features, made some big bets, and set ambitious recruiting targets to meet them. I assumed that the favorable economic climate would continue into 2022,” he told staff.

“Instead, conditions changed faster than expected and the assumptions I made were wrong. I learned a lot to take with me in the next phase of building Linktree. That next phase means we need to narrow our focus on our long-term strategy by reducing features that are no longer aligned with our roadmap.”

The company warned staff 10 minutes before those being retrenched were notified via email.

Zaccaria then said on LinkedIn that the cuts were “to come out of the economic downturn stronger”.

His comments reflect a similar comment Shopify CEO Tobi Lutke two weeks ago when the Canadian company announced a 10% cut in its workforce because “it is now clear that the bet has not paid off”.

It’s been less than five months since Melbourne-based Linktree announced a $152 million (US$110 million) raise that the company describes as a Series B expansion. The company claimed a valuation of $1.8 billion after the March raise. That third round of capital came 12 months after the first $59 million Series B.

Profitable from the start

Linktree has been profitable since its launch in 2016 and had a startup through 2020, having first raised capital with a $15 million Series A in October of that year.

Zaccaria told staff that the company “exceeds legal requirements in all markets and rewards tenure” and that the average payout is over 11 weeks. The company waives the next milestone for the vesting of its staff who have accepted the grant of options under Linktree’s ESOP. All departing employees keep their Macbooks and all home work equipment.

The company is also holding a company-wide mental health day on Friday.

Startup Daily reached out to the company’s PR agency for company comment. It referred us to Zaccaria’s LinkedIn post.

Linktree’s investors include European VC Index Ventures, Coatue Management in New York, local funds AirTree and Insight Partners. American company Greenoaks, Melbourne-based tech unicorn Airwallex, Afterpay co-founder Nick Molnar, LinkedIn executive chairman Jeff Weiner, former Bumble exec Michelle Kennedy and former Slack exec April Underwood.

The job losses at Linktree follow in the wake of a series of tech job losses, both locally and globally, in addition to some major startup collapses.
Last week, digital marketing startup Metigy was placed in administration with the loss of 75 jobs.

Last month, Sydney NFT gaming startup Immutable fired 20 employees from its team — 6% — less than five months after raising $280 million, just days after Fintech Indebted laid off 40 employees amid $22.5 million raise.

Courier service Sendl has cut 12% of its global workforce.

In recent months, the Volt neobank has also closed, after it was unable to attract new capital, with the loss of 140 jobs. Melbourne cryptocurrency startup Banxa cut 30% of its workforce and fintech Brighte cut 15% of its team, while Melbourne-based creative marketplace Envato cut 100 jobs worldwide. Clinical trials medtech HealthMatch cut its team in half, with the loss of 18 jobs.

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