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Startup Bolt announces job cuts as tech hiring slows

Yahoo Finance Live anchors discuss Bolt's decision to make job cuts.

Video Transcript

JARED BLIKRE: Yeah, layoffs continue to batter tech companies, with fintech startup Bolt becoming the latest platform to announce cuts. They're citing "structural changes," and that's a quote, for the reason behind the decision. And Bolt joins companies like Lyft, Netflix, and Peloton, who also slashed their workforce. At least, they announced their plans to. And Julie, this is an interesting story here. We live in New York, and I kind of can get my finger on the pulse of what's going on with a lot of these startups by the quality of their service.

I don't use all of these, but for instance, I had this grocery delivery service, Avo, and their pitch was they would come to you and serve your entire building. So you could order one item, two items-- it doesn't matter how few. And you just pay a flat fee. There's no delivery fee. There's no tipping. It's really nice, but they just pivoted. They're not doing any kind of service, what they did before-- something to do with businesses.

My point is, a lot of these companies are-- the rubber is hitting the road. They're facing higher borrowing costs and the prospect of those borrowing costs going much higher. And we're starting to see these layoffs.

Important to note, too, that this doesn't necessarily translate into layoffs for the rest of the economy. But this is a potential canary. And I'm glad we're talking about this because I'm just seeing more of this. And I think we're going to see-- I think the ball has just kind of started rolling. There was an interesting graphic we were talking about, a company called Klarna the other day. And I was able to find, thanks to Ines Ferre, a chart of all the startups and the layoffs.

And so, you look at it. Here is the pandemic. I'm sorry, I don't have it here. That's natural gas. I was going to use my fingers. So here is the pandemic, and it makes kind of a U. So we are at the other end of that U. It's not there yet. But there's a U.

JULIE HYMAN: I like this technical charting--

JARED BLIKRE: With my hands.

JULIE HYMAN: --with your hands.

JARED BLIKRE: Yes, time out.

[LAUGHTER]

JULIE HYMAN: What's also interesting to me regarding these startups is, I've been seeing some chatter over the past couple of days that the venture capital funding has finally started to tighten.

JARED BLIKRE: Yes.

JULIE HYMAN: And this was something we were hearing was not happening, even as the equity markets, the public equity markets were tumbling. We were talking to folks in the VC world initially, a month, two months ago, who were saying, no, everything's still wine and roses over here. Funding is still not a problem.

But now it seems to be the, we are seeing a little bit of tightening. So you're getting the privately held startups in particular. And Bolt is on that list, in addition to Klarna, which is still private. Bolt reportedly is laying off employees as well. So that perhaps a reflection of that their funders are also not being as patient with them in this particular environment. So that's part of it.

It's also interesting when you say, well, it's not necessarily a proxy for the broader environment and what we're going to see. I mean, I was just mentioning what's happening with Apple, where they're actually raising wages. So those with the resources to still continue to do so are still going to focus on employee retention for now--

JARED BLIKRE: Good point.

JULIE HYMAN: --in this environment, perhaps, but it's definitely a really interesting story to continue to watch.

JARED BLIKRE: Yes, it is.