There is a viral outbreak of the Coronavirus and this virus, which started as an epidemic from China has now spread everywhere around the world and is officially now a pandemic. Now, we know that this is a topic related to the health and wellness sector but it is also related to startups and businesses in general. Because everything is shut down right now due to global pandemic and it is affecting the startups mostly because they are struggling to make ends meet.
Now, the first major fallout from a startup has been reported as the report claims that a popular startup named People.ai has laid off 18% of its staff. The main reason for this layoffs would obviously be the coronavirus pandemic. It is also said that People.ai is downsizing because of the current economic situation and it is the best way forward for them. They are also fundraising to sustain themselves and weather the storm in the form of COVID-19.
People.ai is a predictive sales startup backed by Andreessen Horowitz, Iconiq, Lightspeed and it was valued at $500 million till last year. Also, a debt round was raised by People.ai said to be of “tens of millions of dollars” to make investments in products and other moves for the company’s future.
However, People.ai’s CEO says that these layoffs are not because their business has gone down but because they are anticipating what’s to come ahead. It is also said that “We still have several years of the runway with what we’ve raised,”. “But no one knows the length of the downturn, so we wanted to make sure we could sustain the business through it.”
According to a report regarding the impact of Coronavirus on startups, it is said that “there have been nearly 25,000 people laid off from 258 tech startups and other companies” so far.