Another Round of Layoffs Points to the Growing Tension Within the Tech Industry

Lon Harris
Lon Harris is a contributor to dot.LA. His work has also appeared on ScreenJunkies, RottenTomatoes and Inside Streaming.
Another Round of Layoffs Points to the Growing Tension Within the Tech Industry
Drew Grant Midjourney

According to a new report from Bloomberg, Facebook and Instagram owner Meta are planning a fresh, significant round of layoffs that could happen as soon as this week. Thousands of employees are expected to lose their jobs, and that’s after the company cut 11,000 workers – 13% of its total workforce – in November of last year.

The November cuts were part of an ongoing project Meta leadership has dubbed “flattening,” an attempt to reorganize the entire company from the top-down to make it more “nimble.” CEO Mark Zuckerberg has dubbed 2023 Meta’s “Year of Efficiency,” in an attempt to familiarize employees with his thinking and prepare them for the changes to come. Broadly, the thinking goes that, while multiple layers of management and supervision make organizations more predictable and reliable, the bureaucracies ultimately stifle innovation and individual employee development. As well, they make the organizations slower to react to change, because so many different individuals on so many layers have to re-evaluate and alter their workflows.

The latest round of cuts is not directly connected to the flattening plan, according to internal sources who spoke with Bloomberg, but will be made out of necessity, due to a downturn in ad revenue and a shift in focus toward the Metaverse. They’re the latest indication of Meta’s increasing desperation for new revenue streams. (Fortune reports that the layoffs ALONE likely cost Meta around $88,000 per employee.)

Regardless of the specific motivations behind the layoffs, and beyond their immediate costs, dropping so much staff in so little time is bound to have some ongoing consequences and ripple effects. Even before Bloomberg’s report about new layoffs, Meta’s flattening project and “Year of Efficiency” announcement was already being blamed for a downtown in productivity at the company. In February, the Financial Times reported that Meta managers lacked clarity around their team budgets, headcounts, and other important information, making them functionally unable to plan for their workloads and ongoing projects. Some staffers told FT that “zero work” was being done amid all the uncertainty, adding that the Year of Efficiency began with “a bunch of people getting paid to do nothing.”

Elon Musk’s Twitter has also entered the “Find Out” phase after F*cking Around with layoffs over the past several months. On two separate recent occasions, minor code changes to the microblogging platform and social network caused widespread problems and outages. Most recently, on Monday, what Musk described as a “small API change” behind the scenes interrupted Twitter users’ ability to post both links and images. Musk blamed an “extremely brittle… code stack” which will ultimately require a “complete rewrite” to fully repair, but it’s worth pointing out that Twitter rarely had these kinds of widespread major outages before letting go of a considerable chunk of its engineering squad.

Beyond the organizational and practical impacts of losing so many people so quickly, there are also bound to be long-term implications for recruitment and morale. On Monday, the same day that links and images broke platform-wide, Musk was confronted publicly on the app by an Icelandic employee (or former employee, depending on who you believe) named Haraldur Thorleifsson, or Halli for short.

Thorleifsson – who has muscular dystrophy and uses a wheelchair for mobility – founded a creative agency named Ueno in 2014, which had partnered with Twitter on a number of design and product experiences over the years. In 2021, well prior to Musk’s direct involvement with the company, Twitter acquired Ueno and brought in Thorleifsson as an employee. He explained in a series of tweets to Musk on Monday that he’d lost remote access to Twitter’s system, and was unable to confirm with HR whether or not this was because he’d been terminated from the company. Musk responded aggressively, with a string of questions and challenges implying that Thorleifsson’s work was not providing value, and even referring to his disability as an “excuse.” He added “you can’t be fired if you weren’t working in the first place.” Thorleifsson’s stinging response, sent on Tuesday morning, now has nearly 30,000 retweets and over 200,000 likes, at the time of this newsletter’s publication.

PR-wise, it’s probably a bad look for Musk, and he may even be potentially running afoul of some Californian and international labor laws, if the thread’s many commenter-spectators are to be believed. But the situation also points to a larger tension within the technology industry, between managers who rely on what they view as essentially an infinite supply of fresh young talent eager to work for big brands and hot startups, and a pandemic-hardened workforce that has come to expect more equitable treatment and compensation.

University College of London professor Anthony Klotz – who originally coined the term “The Great Resignation” in May 2021 to refer to all the people who quit their job during the pandemic – predicts that the trend will finally even out this year, as labor shortages abate and more people gradually return to offices. (Klotz cites the potential for a recession, which will potentially force some people to return to jobs they were maybe happy to have left, as a major factor.)

But while most charts, including data from the US Bureau of Labor Statistics, show the resignation trend becoming more “muted,” there are signs that the Great Resignation may still be influencing overall decision-making on both sides of the employee-employer divide. According to HR Digest, companies that invested in employee development and efforts to attract and keep talent saw a 58% increase in employee retention in 2022. On a recent LinkedIn survey, 61% of US employees said they were considering resigning from their jobs in 2023.

In the aggregate, it’s probably too soon to tell whether or not the pandemic and Great Recession were a blip on the labor market radar or a significant milestone event that with any kind of real long-term impact.

Big Wins: Dodgers Take the Title ⚾, ChatGPT Levels Up🚀

🔦 Spotlight

Happy Friday, LA! It’s been a week of big wins, on and off the field. 🎉

⚾️ First up, let’s talk Dodgers. With a thrilling 7-6 comeback victory over the Yankees in Game 5, the Dodgers clinched their eighth World Series title, their first since 2020. The city is buzzing, and fans are ready to celebrate! A parade kicks off this morning at 11 a.m., starting at City Hall and winding down to Flower Street, with a ticketed celebration at Dodger Stadium for those wanting to keep the festivities going.

Image Source: Dodgers

💻 Meanwhile, in the tech, OpenAI just rolled out a game-changing update for ChatGPT. Plus and Enterprise users can now access real-time internet search, powered by Microsoft Bing, bringing ChatGPT's responses fully up-to-date. This means users can now ask about the latest news, hotspots, or recent LA startup announcements, and ChatGPT will pull in fresh, relevant answers directly from the web. Previously limited to information up to 2021, ChatGPT’s new browsing capabilities make it a valuable digital assistant for anyone needing real-time insights in fast-paced industries like tech and entertainment.

Image Source: ChatGPT

🔍 The real-time search feature also includes “Browse with Bing,” allowing ChatGPT to source information from multiple sites for detailed answers to complex questions. Whether you’re exploring the latest venture capital trends in LA or curious about the best local spots, ChatGPT’s new browsing power helps you stay ahead with the latest info. This leap forward in AI functionality makes ChatGPT even more versatile and powerful for everyone, from business owners to everyday users.

From the Dodgers’ World Series win to OpenAI’s latest ChatGPT update, there’s a lot to celebrate in LA this week. Here’s to champions, innovation, and a city that’s always pushing boundaries. 🌆✨


🤝 Venture Deals

LA Companies

  • Final Boss Sour, a Los Angeles-based gaming-themed snack company specializing in healthier sour snacks, has raised a $3M Seed funding round led by Science Inc. to expand its product offerings and operational capabilities. - learn more
LA Venture Funds
  • Smash Capital led a $50M Series B round for Read AI, a productivity-focused AI company, bringing its total funding to $81M. The company offers a platform that enhances meeting efficiency through features like note-taking, summarization, and transcription. Additionally, Read AI introduced "Read AI for Gmail," a free Chrome extension that integrates information from various applications, reducing the need to switch between apps. The funds will be used to increase the company's headcount in engineering, data science, and business teams. - learn more
  • Distributed Global participated in a $25M funding round for Nillion, a company that provides decentralized privacy solutions designed to secure sensitive data using advanced technologies like secure multi-party computation. - learn more
  • Act One Ventures participated in a $5M Seed funding round for Latii, a construction materials supply chain startup, to enhance its platform that connects contractors with suppliers, aiming to streamline procurement processes and reduce costs in the construction industry. - learn more
  • SmartGateVC participated in a pre-seed funding round for Ritual Dental, a company revolutionizing dental care by integrating advanced technology and microbiome science to provide personalized, preventive treatments. - learn more

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      Billion-Dollar Milestones and Snapchat’s New Features

      🔦 Spotlight

      Happy Friday Los Angeles!

      This week’s spotlight showcases LA’s thriving tech scene, featuring Snapchat’s latest feature updates and two local startups Liquid Death and Altruist, making TechCrunch’s Unicorn List for 2024.

      Image Source: Snap

      Snapchat’s recent fall updates bring fresh features, including a new iPhone camera shortcut for instant snaps, Halloween-inspired AI-powered Lenses, and Bitmoji costumes inspired by Mean Girls and Yellowstone. Bitmoji stickers now reflect trending Gen-Z expressions like “slay” and heart symbols for added flair in chats. Plus, the “Footsteps” feature on Snap Map allows users to track their past adventures privately, adding a nostalgic touch.

      Image Source: Liquid Death

      ICYMI, two LA startups joined the Unicorn Club—achieving valuations over $1 billion. Liquid Death, based in Santa Monica, is a canned water company with edgy branding and a humorous sustainability focus. Known for viral marketing and brand partnerships, it redefines bottled water as a lifestyle brand and environmental statement. In March, Liquid Death closed $67 million in strategic financing, raising its total funding to over $267 million and valuing it at $1.4 billion.

      Image Source: Altruist

      Altruist, a Culver City-based fintech platform, offers financial advisors streamlined tools to better serve their clients. With a user-friendly investment and account management platform, Altruist has gained strong traction in the finance world. In May, it announced a $169 million Series E funding round, bringing its total funding to over $449 million and earning a valuation of $1.5 billion.

      Together, Liquid Death and Altruist exemplify LA’s capacity for innovation across diverse sectors, from lifestyle branding to fintech. Whether reshaping financial tools or redefining sustainable branding, these companies showcase LA’s unique entrepreneurial spirit. Go LA!

      Check out TechCrunch’s 2024 Unicorn List here. And don’t miss Snapchat’s latest features—perfect for adding some fun, connection and maybe a few selfies this weekend!


      🤝 Venture Deals

      LA Companies

      • Freeform, a company bringing AI to metal 3D printing, raised $14M in funding from NVIDIA’s NVentures and AE Ventures to further develop its AI-powered 3D printing technology for industrial-scale production. - learn more
      LA Venture Funds
      • Anthos Capital participated in a $70M Series D round for Carbon Robotics, which develops AI-powered robotics for precision agriculture, and the funding will be used to accelerate the growth of its autonomous weeding technology. - learn more
      • Anthos Capital participated in a $3.5M seed round for Plasma Network, aimed at expanding access to USDT stablecoins on the Bitcoin network, with the investment supporting the network’s growth and efforts to enhance stablecoin accessibility through the Lightning Network. - learn more

      LA Exits


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          ⚖️FTC’s "Click to Cancel" Rule and Its Ripple Effect on Tech

          🔦 Spotlight

          Happy Friday Los Angeles,

          The FTC’s new “Click to Cancel” rule is shaking up subscription-based tech. Now, instead of navigating a maze of cancellation hurdles, users can cancel subscriptions as easily as they signed up—with a single click. This shift is a wake-up call for SaaS, streaming, and app-based companies, where once-hidden exit options often kept users around simply because canceling was a hassle.

          The rule also requires businesses to send regular renewal reminders, ensuring customers stay informed about upcoming charges. It's more than a cancellation button—it’s about transparency and giving users control over their decisions.

          For startups, the impact goes deeper than UX adjustments. Many have relied on "dark patterns," which subtly discourage cancellations by hiding the exit. Now, companies must shift toward building genuine loyalty by delivering real value, not by complicating exits.

          While this might affect retention rates initially, it could lead to more sustainable business models that rely on satisfaction-driven loyalty. Investors may start prioritizing companies that emphasize transparent, long-term engagement over those that depend on dark patterns to maintain retention metrics.

          The rule opens the door to more ethical UX design and a truly user-centered approach across the tech industry. It may even set a precedent against manipulative design in other areas, such as privacy settings or payment methods.

          Ultimately, the “Click to Cancel” rule presents an opportunity for the tech industry to foster trust and build stronger customer relationships. Startups and established companies that embrace transparency will likely stand out as leaders in a new era of customer-centric tech, where trust—not tricky design—is what retains users.

          As the tech landscape continues to evolve, LA Tech Week 2024 offers a chance to explore these shifts in real-time. Check out the upcoming event lineups to stay informed and make the most of your time:

          For updates or more event information, visit the official Tech Week calendar.


          🤝 Venture Deals

          LA Companies

          • Ghost, a company supporting top brands and retailers with streamlined logistics and fulfillment solutions, raised a $40M Series C funding round led by L Catterton to fuel its continued growth and innovation. - learn more
          • Terray Therapeutics, a biotech company using generative AI to develop small-molecule therapeutics, raised $120M in a Series B funding round led by Bedford Ridge Capital and NVentures, to advance it’s internal programs to clinical trials and further develop its AI-driven platform, tNova. - learn more

          LA Venture Funds
          • Assembly Ventures participated in a $27M Series A round for Monogoto, a provider of software-defined connectivity solutions that enable secure, cloud-based IoT and cellular network management on a global scale. - learn more
          • Angeleno Group participated in a $32M Series C round for REsurety, a company that recently launched an innovative clean energy marketplace aimed at providing better financial and operational insights to support renewable energy transactions. - learn more

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