Also in this letter:
■ Udaan lays off 1,000 employees and contractors in second round of layoffs
■ US tech layoffs skyrocket as companies battle economic contraction
■ Apple suppliers in India expand capacity amid slowdown in China
Twitter faces class action lawsuit over mass layoffs
Twitter was sued over Elon Musk’s firing plan about half of its workforce, Bloomberg reported Friday, citing a class action lawsuit filed in federal court in San Francisco.
Driving the news: Twitter staff received an email saying the company would alert employees by 9am Pacific Time (9.30pm IST) on Friday if they had been laid off. “In an effort to put Twitter on a healthy path, we will go through the difficult process of reducing our global workforce on Friday,” the email said.
Musk is expected to lay off about half of Twitter’s roughly 7,500 employees.
Accusations: The lawsuit alleged that the company was laying off workers without giving sufficient notice, in violation of the Worker Adjustment and Retraining Notification (WARN) Act, a federal law that requires employers to give workers advance notice. employees affected by plant closures and mass layoffs.
Filed by attorney Shannon Liss-Riordan, the lawsuit sought an injunction requiring Twitter to obey the WARN Act and prevent it from asking employees to sign any documents that would remove their right to participate in the litigation.
Locked: Several Twitter employees took to the platform, saying they had lost access to their laptops, emails and internal Slack channels. the The hashtag #Lovewhereyouworked began to trend on Twitter shortly after
The company email added that Twitter offices would be temporarily closed and access to credentials would be suspended. “If you are in an office or on your way to an office, please return home,” the email said.
“It seems that I am unemployed. I just remotely logged out of my work laptop and got kicked out of Slack. #OneTeam forever. He loved them all very much. So sad it had to end this way (sic),” said Simon Balmain, who had worked as a senior community manager at Twitter.
Twitter offline for some: In the meantime, Twitter was down for several users on Friday, with many reporting problems with the site. Users said that when they tried to log in they received a message saying, “Something went wrong, but don’t worry, try again.”
According to the Downdetected website, 92% of complaints were about issues with the website, while only 6% were about the app.
Advertisers press pause: In the midst of chaos, several companies have stopped placing ads on the platform until they have a clearer idea of Musk’s plans. On Friday, General Mills Inc said it will temporarily pause advertising on Twitter, joining Volkswagen AG’s Audi and General Motors in rethinking its presence on the platform.
Udaan lays off 1,000 employees and contractors in second round of layoffs
Business to business (B2B) E-commerce marketplace Udaan has laid off 300-350 employees on staff and a significant portion of its contract workforce, for a total layoff of more than 1,000 people, according to sources familiar with the matter.
Round 2: This is the second round of layoffs for the company after laid off 180-200 employees, or 5% of its workforce – and 700-800 contract workers in June.
“As we continue on our journey to make Udaan profitable, the drive for efficiency improvements and the evolution of the business model have created some redundancies in the system, with some roles no longer needed. As a responsible organization, we are working to provide all necessary support to affected employees,” the company said in a statement.
Debt Financing: development comes after the company raised $120 million through convertible notes of existing shareholders and bondholders at the end of October. This is the second time the company has raised funds through convertible notes. He previously raised around $225 million this way in January.
A convertible note is a form of short-term debt that is converted into equity, usually in conjunction with a future round of financing. The main advantage of issuing convertible notes is that it does not force the issuer or investors to determine the value of the company, thus avoiding “rounds down” at a lower valuation.
Growing trend: As the negotiation becomes more difficult, many companies, including Byju’s, Boat and Pharmeasy, turn to raise funds through these debt instruments to preserve their ratings, we reported on October 12.
US tech layoffs skyrocket as companies battle shrinking economy
the funding winter, soaring inflation and fears of an impending recession they are hitting American tech companies around the world hard.
These are some of the companies that have announced layoffs or hiring freezes in recent days.
Lyft: The transport company said would lay off 13% or almost 700 employees to deal with the weakening economy.
Stripe: The digital payments giant, valued at $95 billion in its latest funding round, is reduce your headcount by approximately 14%leaving it with about 7,000 employees.
Open door: The real estate startup will lay off about 550 people or 18% of its staff across all functions, its co-founder and CEO, Eric Wu, announced in a blog post on Wednesday.
Ring: One of the world’s largest fintech companies said it will lay off 12% of its 1,300 workers.
Amazon: Although Amazon hasn’t decided to cut its headcount as of now, it is pausing “incremental new” hiring in its corporate workforce.
Apple suppliers in India expand capacity amid slowdown in China
Apple contract manufacturers in India: Foxconn, Wistron and Pegatron – are expandingadding more assembly lines to its facilities to offset a slowdown in iPhone manufacturing in China ahead of the upcoming Chinese New Year amid strong local demand, industry executives familiar with the matter told us.
Yes, but: The ongoing lockdown at Foxconn’s plant in Zhengzhou, China, the world’s largest iPhone manufacturing facility, will not prompt Apple to increase manufacturing in India immediately, they added.
That’s because it’s easier for Foxconn to simply shift production to another unit inside mainland China. Furthermore, its partners in India do not yet have the necessary capacity and technical expertise to handle the additional production.
India bags new manufacturer: Meanwhile, Apple’s Taiwanese contract manufacturer Pegatron Corp has started assembling the latest iPhone 14 model in India. This makes Pegatron the second Apple supplier to produce the iPhone 14 in the country, people familiar with the matter told Bloomberg News.
Summary of ETtech offers
The funding tap has been running dry for most Indian startups for some time now as investors around the world have been wary of pouring money into risky startups.
The US Federal Reserve’s decision to raise interest rates by another 75 bps this week rattled markets and worsened the liquidity crisis. Other major central banks, including the Bank of England, have also raised rates.
Some Indian startups have had no choice but to lay off workers to cut costs, while others are using debt instruments like convertible notes to raise money.
Today’s ETtech Top 5 Newsletter was selected by Zaheer Merchant in Mumbai. Graphics and illustrations by Rahul Awasthi.