Bolt, the fast-growing online payments start-up that was valued at $11 billion earlier this year but recently instituted a hiring freeze as the wider market wobbled, began laying people off on Wednesday.
In a message to employees that was also posted on Bolt’s website, Maju Kuruvilla, the chief executive, attributed the layoffs to “structural changes” amid “macro challenges,” but did not provide further details.
“The leadership team and I have made the decision to secure our financial position, extend our runway, and reach profitability with the money we have already raised,” Kuruvilla wrote.
The San Francisco-based company, which builds software to simplify the checkout process for merchants and shoppers, was already facing challenges, including a lawsuit filed late last year by one of its biggest customers.
This month, a New York Times investigation found that the company and one of its co-founders, Ryan Breslow, had inflated metrics and overstated Bolt’s technological capabilities in pursuit of ever higher valuations. In April, Bolt announced a three-month hiring freeze.
Bolt, which had around 900 employees, according to its LinkedIn profileand recently acquired a cryptocurrency firm, is hardly alone in its struggles.
Since the beginning of the year, some 100 start-ups have let go employees amid a worsening outlook for young companies, according to Layoffs.fyi, a crowdsourced site that tracks layoffs at tech start-ups. In recent weeks, venture capital funding has dried up, as investors across the board — shaken by the prospect of worsening inflation, rising interest rates and geopolitical uncertainty — have turned more cautious. That has forced dozens of start-ups, which are heavily reliant on venture funding to build their businesses, to cut costs.
Wednesday’s layoffs cap a tumultuous period for Bolt. The company, which soared to an $11 billion valuation in January from $250 million just over three years before, is being sued by its customer Authentic Brands Group, a big holding company that owns and licenses brands like Brooks Brothers and Forever 21. Authentic Brands said in the lawsuit that Bolt had failed to deliver on the technological capabilities it had promised. In its motion to dismiss the suit, Bolt disputed elements of those allegations.
In his note Kuruvilla did not tell employees how many of their colleagues were laid off, or which departments were cut. But as workers were told that they no longer had jobs and as their access was revoked, the number of employees in the company’s main Slack channel kept dropping throughout the day, according to two former employees and a current one.
By midday, it had dropped to around 660 employees, they said.
Mr. Bolt declined to comment beyond Kuruvilla’s message.