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Carta lays off 10% of the workforce

70 points| nvdnadj92 | 3 years ago

Just got off company announcement, here are the key details:

   - the departure affected 10% of the company
The benefits include:

   - 2.5 months of severance, plus one week for every year of tenure
   - 3 months of health insurance
   - 1 year cliff for RSUs waived for new employees. In cases where employees did not get equity, they get a lump sum payout
   - Visa holders get one 30-minute paid consultation with an immigration attorney
   - Voluntary self departures accepted until 12PM tomorrow, but self-departures only get 2.5 months (tenure not factored in severance)

85 comments

order

softwaredoug|3 years ago

According to Blind the CTO was also fired and is being sued by the company

> eShares Inc. d/b/a Carta Inc. filed a breach-of-contract and trade secrets lawsuit against former CTO Jerry O. Talton III on Friday in New York Southern District Court. The suit, brought by Dechert, accuses the defendant of leaking private, privileged and confidential info to outside parties in order to induce and assist legal claims against the company. Counsel have not yet appeared for the defendant. The case is 1:22-cv-10987, eShares Inc. v. Talton.

https://www.law.com/radar/card/eshares-inc-v-talton-iii-4732...

qaq|3 years ago

"Visa holders get one 30-minute paid consultation with an immigration attorney" wow

prepend|3 years ago

I think it basically means they can’t answer visa related questions so anything they can’t answer gets punted to this consult.

It’s a consideration that they’ll have lots of questions that would have been “I don’t know, go find an attorney.” So now it’s “we paid this attorney to answer you up to 30 minutes.”

Visa holders are extra hosed during layoffs, but there’s not really any way to avoid this as you can’t favor visa holders to not be laid off.

mathieuh|3 years ago

I know lawyers can be verbose but surely it takes less than 30 minutes to say “you’re fucked”

nvdnadj92|3 years ago

better than nothing, in my opinion. At least they were considered.

themitigating|3 years ago

Seriously? Look at their other severance benefits.

Besides if you need an attorney for an immigration case it would be a massive amount of hours. The 30 minutes consultation is helpful to decide if you need to pursue a case.

I can't believe with all they are giving you still had to shit on it somehow.

danwee|3 years ago

I always wondered how American companies lay off European employees (when the companies have branches in European countries). Usually, in Europe, you cannot just fire someone without a justified reason (and no, saving costs is not a justified reason). Such reason are usually: the employee did something illegal (data leaks, sell internal information, etc.) or something related to harassing other employees. Even with bad performance, they cannot just fire you without first giving you the option to "recover".

I don't know Carta at all, but if they had an European branch and if I were an European employee that is being told "you're fired", well, they will have a really hard time doing it.

Pinus|3 years ago

I don’t know about the rest of Europe, but here’s how it usually plays out in Sweden: 1. Company needs to save money. 2. Company decides to shut branch office X and cancel project Y. 3. Company now has more employees than it has positions. 4. Employees get reshuffled across remaining positions according to complex rules (but basically last-in-first-out). 5. Employees that end up being "left over" are laid off. So the official reason is not "lack of money", but "lack of work". I’ve seen it happen several times, and ended up on both sides of the rope, so to speak. It’s a matter of Following The Procedures, but that’s all there is to it.

Guid_NewGuid|3 years ago

I can only speak to the UK who remain a European (if not EU) country. My understanding having been through it in my first job, is in the UK you must make a given number of a specific role redundant. So it's not the people you're laying off but instead you say, we're making cuts to 4 sales positions. There is then a required consultation period where the people to be laid off are identified so there's always forewarning that cuts are happening but not to who.

So it's not firing but it's still perfectly possible to reduce headcount. What you can't do is the standard US move of firing everyone with zero notice by email.

mardifoufs|3 years ago

I think there's a legal difference between laying off employees "in bulk" by shutting down teams/divisions versus firing individual employees .

rsj_hn|3 years ago

> (and no, saving costs is not a justified reason)

This is incorrect. Every jurisdiction allows for laying people off to reduce costs. This is the primary thing a business is supposed to do -- hire when there is more work and fire when there is less work.

The only requirements in the EU are notification periods and filing the appropriate paperwork for mass layoffs -- known euphemistically as "collective redundancies". See here: https://europa.eu/youreurope/business/human-resources/employ...

Moreover European companies lay people off all the time during downturns as does everyone else.

https://www.wsws.org/en/articles/2022/12/23/mkez-d23.html

kaesar14|3 years ago

How is saving costs not a justifiable reason? Maybe all of this is why European employees have such a hard time finding US salaries.

baggy_trough|3 years ago

How can "we don't have the money to pay you" not be a justified reason?

jack_riminton|3 years ago

If the company cannot afford the post, then you're made redundant. So yes you can quite easily get rid of people to save costs.

seanhunter|3 years ago

I have been involved (from a Senior management perspective) in one significant layoff that affected US and UK employees. How we did it in that case is we took legal advice about what was the minimum requirement, and then leveled-up/adjusted from there to try to be as generous as we could. Layoffs are certainly possible even within the framework of EU labour law, but employees have more rights and depending on how big you are there may be additional requirements (eg in large companies in continental Europe I believe labour representatives have to be involved in the planning of the layoff etc).

The exact specifics of the deal in our case were a little different for US and UK folks because of things like how healthcare works in the US being so completely awful so you have to figure out things like COBRA which would just not be a thing in Europe. That forced us to adjust things to make it equitable/equivalent for both US and UK folks, but we really tried our best to be fair to everyone.

While the base requirements are much higher in the UK/Europe than in the US if you have teams in both places, you should do whatever you can to offer broadly the same deal to both teams. Besides your basic duty as a human to be fair to people, note that your remaining employees will judge you based on how you treated their departing colleagues.

globalise83|3 years ago

I find it strange that the incentives for self-departure are weaker than for non-voluntary departure. Usually it's the other way around, or maybe just where I come from. What's the logic behind incentivising people to not quit?

m8s|3 years ago

I was about to ask the same thing. Why would someone leave voluntarily for worse benefits?

licebmi__at__|3 years ago

Provided that you had a business plan behind the layoff and you keep only employees whom you deem necessary for that business plan. Why would you want them to leave?

redtriumph|3 years ago

One of the founder's listed is Manu Kumar who has one of the longest Linkedin profile I've come across:

https://www.linkedin.com/in/sneaker

nvdnadj92|3 years ago

Been at the company 3 years, this guy Manu was there in the early days, but he is pretty much a ghost since the past 7 years. He's moved on, I think he is a VC now.

jonas-w|3 years ago

Is there a way to view linkedin profiles without logging in?

olivetan|3 years ago

Liquifi ("Carta for crypto"), is hiring across all roles. Liquifi helps companies automate their token vest plans & also manage their token cap tables. We're actively hiring & would love to chat with anyone that was affected by these layoffs.

If interested, feel free to apply via our website at: https://www.liquifi.finance/

Or reach out to me directly at oliver@liqufi.finance

adrr|3 years ago

For the RSUs. Is there a buy-back program for shares? Taxes on these far out weigh the benefit. Carta with $150m of revenue is not worth over $1B and is closer to $500m if it went public right now. Use other fintechs that went public for comparison like Robinhood, Coinbase, Toast etc.

dilyevsky|3 years ago

I could be wrong but carta should have much better margins than the two you mentioned so it should be closer to traditional 7-10x saas multiplier. Sometimes there are tender offers for rsus but usually you have to wait for trigger event, I don’t think RSUs are worse than say NSOs

umeshunni|3 years ago

Most RSUs are double trigger and don't trigger taxes till an actual liquidity event

naandanaan|3 years ago

where are you getting the rev figure?

henning|3 years ago

Carta always talks about how it imagines itself as a sports team. When the team is doing badly, don't they usually fire the head coach? I guess they aren't willing to take the analogy that far, they just like the bit about expecting everyone to be a superstar.

beambot|3 years ago

Who said Carta was performing poorly? A more apt analogy is that the franchise's budget just got slashed by 10%, so now they need to rearrange the talent budget... This happens all the time in sports teams too.

frollo|3 years ago

They fired and sued the CEO, which means they should probably have noticed something before having to fire 10% of the company.

muzz|3 years ago

It would be interesting to see the uptake on the last bullet point, ie the percentage of people who didn't get laid off but took a voluntary severance

sicp-enjoyer|3 years ago

Why did this get removed from the front page so quickly?

sithlord|3 years ago

2.5 months severance is pretty low compared to the other layoffs that have happened recently.

snihalani|3 years ago

As an immigrant who got laid off this year, I am hating on every company that doesn't offer to keep you on payroll with the severance money

bushbaba|3 years ago

Legally if you are on payroll but not doing work the visa issue remains. Now will the government actually enforce that who knows. I’m not a lawyer. This is not legal advice.

pjdemers|3 years ago

If you are still on the payroll, the company is committed to paying you, which means they don't get to recognize (accounting-wise) the cost savings of letting you go. They could convert you to a temporary FTE, but that doesn't help your visa. Severance and other costs of letting people go are recognized as soon as the employee walks out the door.

rvz|3 years ago

Another day, another downsizing. The warning signs were right in front of you: [0]

And now everyone and including their cats and dogs are all talking about a 'recession'. You're too late, it has already happened and it is lagging behind and taking effect. Should have prepared for that in November 2021.

You were warned.

[0] https://news.ycombinator.com/item?id=29508238

henning|3 years ago

I've been waiting for the other shoe to drop for a decade.