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Embattled Payments Startup Bolt Is Cutting One-Third of Staff

·3 min read

(Bloomberg) -- Payments startup Bolt Financial Inc. is eliminating about 250 employees, according to a person familiar with the company. That number is equivalent to about one-third of Bolt’s workforce, the person said.

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In a message to staff on Wednesday, Bolt Chief Executive Officer Maju Kuruvilla wrote that the company was making cuts as part of a broader restructuring. “It’s no secret that the market conditions across our industry and the tech sector are changing,” Kuruvilla wrote in the message, which was also posted to the company’s blog. “In an effort to ensure Bolt owns its own destiny, the leadership team and I have made the decision to secure our financial position.” The company began holding meetings with employees Wednesday morning.

Bolt was most recently valued by investors at $11 billion, a price tag that made it one of the most valuable startups in the US. The company’s software aims to provide retailers with one-click online checkout options. But Bolt has run into trouble recently: The startup was sued by its most prominent customer, which claimed that its technology did not work as promised.

Bolt, founded in 2014, has garnered national attention for giving employees Fridays off and for the tweetstorms of its colorful co-founder, Ryan Breslow. Earlier this year Breslow claimed in a series of tweets that Silicon Valley’s elite is a “boys club” full of “mob bosses.” Breslow stepped down as CEO soon after the tweets, becoming the company’s executive chairman.

After Bolt closed its latest funding round, the company started trying to raise more money at an even higher $14 billion valuation. However, like many other startups in a newly difficult economic climate, it has abandoned those fundraising plans, according to the person with knowledge of the situation, who asked not to be identified discussing private information. In his note to staff, Kuruvilla said that Bolt would aim to “reach profitability with the money we have already raised.”

Bolt is one of many companies that has laid off staff in recent weeks, as public markets hammer tech stocks. Venture backed startups have cut thousands of jobs this spring, according to employment tracker Layoffs.fyi.

The job cuts at Bolt were sudden. The company had held annual reviews for employees earlier this month — a process which resulted in some people getting a pay increase. A company spokesperson said that some salaries had been “calibrated.”

Earlier this year, when Bolt appeared to be on a rocket ship to ever-higher valuations, the company gave many of its employees loans in order to exercise their stock options early. If the value of Bolt’s shares tumbles, employees who took out loans could be in a financially precarious situation. A spokeswoman for the company said that the number of employees who lost their jobs on Wednesday and who had also taken out loans was “in the single digits” and that the value of those loans was less than $200,000.

“We are being extremely thoughtful of any impact this restructuring has on our employees, including the Early Exercise & Loan Program,” the spokeswoman wrote in an email.

(Updates with the number of layoffs at Bolt in the first paragraph.)

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