This is the worst take I have ever seen. This company just raised $250 million. That is more money than 99% of companies will ever have in the bank. Being a "startup" does not given you license to wantonly play with your employees' lives and wellbeing. As the quote from Dalton above shows, there are norms around these things which companies 1/100 this size regularly abide by.
This is not normal behavior for any company, and you should run away from anyone trying to convince you otherwise. The people responsible should be treated like pariahs.
They raised $260 million and had at their peak 1500 employees.
Think for a moment how far $260 million gets you when you have 1500 tech employee salaries in Seattle to pay. Plus operating expenses. Don't forget to add 15.3% for payroll tax. Median software engineer compensation in Seattle is 219k. Infrastructure and office space isn't free either. Seattle office space averages $43/sqft and the average employee space is 150-175 sqft.
That. Money. Is. Long. Gone. It's not a bad take, you just won't do basic math.
Raising $260M doesn't mean you're rich. The investors expect you to spend that money and otherwise why are you raising that much?
They spent 4 months looking for a buyer and had already shed 1000 employees before shutting down operations. It's not like current employees were clueless about what was going on.
Functionally there's little difference between operating up until now or giving 500 "chosen, lucky" people severance 3 months ago.
None of those factors are unique to this business. Somehow adults at thousands of other companies are able to handle this situation reasonably despite also having to pay rent and taxes.
I'm sure very few of the people whose continued work they were depending on for a sale would have stayed this long if they realized they were going to be treated like this.
Actions and comments like this are how you kill an ecosystem.
If your company is multiple funding rounds in and lays off two thirds of its employees in a day, you should be putting your applications out before the close of business day if you're in a situation where you need to make ends meet.
Just because you remained does not mean that your job is secure. This is strictly common sense.
Also I've had a pretty long career and I don't know of any company in this situation who paid 500 employees severance after ceasing operations.
I don't doubt that you've had "a pretty long career," but I wish you had spent a moment Googling before posting this take. I immediately found an example of a 250-person company paying employees severance after deciding to shut down operations. If it's possible at 250 employees, it's possible at 500.
Quibi was also a ludicrous company that gave streamers multi-million dollar up-front no-milestone deals and then shuttered.
They absolutely cratered within six months of launch.
I wouldn't use them as an example of how to competently operate a business. They literally gave all of the investors' money away. They operated more like a charity than a business and if I were one of their investors I'd have been suing.
As if a month or two of severance, which I'd wager your average critic in this thread would promote as laudable, would do much of anything in the grand scheme of job security.
Given the upside of a company surviving, or even ultimately succeeding, as an employee, I'd rather try to help a good/fair company ride it out and survive than folding early to pay out a few months.
This is why dissolution isn't some whopsey-doodle word. When there's nothing left, there's nothing left. If that is a risk, including in that is your private healthcare provision, leave this stuff up to the 20 year olds that don't have the health concerns. Coddled might be too diminutive of a phrase, but if it's a risk you can't live with by your life expectations, don't get involved. Pick another job on the market.
Now healthcare shouldn't be tied to employment, and it's not in my country. But this is the political choices of Americans in America. Not the fault of the individual companies who are subject to the system.
The whole issue with this premise is that someone has to bear the risk. There are no 20 year olds who know with certainty that they don't or will not soon have health concerns that require insurance. Anyone could be get hit with a car walking across the street or get a photon to break some DNA in their skin and cause a melanoma. 20 year olds are not invincible or always in perfect working order.
And yet, statistically, the vast majority will be healthy. And the ones with chronic issues should know where they need to be on how to manage it. It's down to you if how you want to live your life. Plenty of tech companies that aren't startups. Plenty of countries that pay less and have higher taxes that have the safety net. Pick your lifestyle and live with your decision. I did, took the risks, it didn't pay off, but I would do it again.
I don't think you understand how much money is in the bananastand here in the US. Even with a european tier safety net, its not like a huge tradeoff will be made. You could easily pay people the same and give them solid benefits to boot with just a little bit more taxation at the top end of the economy. People act like taxing rich people will scare them off, yet there are probably more rich people in California than in Texas or some other red state where they'd be taxed less presumably.
So move to Europe then. Enjoy your $75k/yr salary with 42% income tax. Other fomments in this thread are using $150k as a baseline salary of reasonable expectation. It's not a big deal to you after all. I on the other hand emigrated from Europe already and don't plan on returning. I make more here now per year than I did cumulatively in my first 7 years of work combined and finally have hope of not living with my mother for the rest of my life and can afford housing. And this is the "it didn't work out" timeline.
Take it up with your elected representative, healthcare should not depend on your employer. Convoy literally does not have money. That's why they're shutting down.
And you aren't being "let go" - the entire company is going under. If you are laid off and the company stays healthy, it makes sense to have some concessions. But if the entire business ceases to exist. I don't know why would you expect anything from it.
Wonder if it might make sense for the social safety net to include such a provision for workers of businesses that go under. If we're not going to have universal public coverage, might as well add provision for such an extenuating circumstance as that.
I love that COBRA isn't just paying the entirety of the health insurance your employer was paying (or partially paying for you), but an additional 5% fee on top of that.
Talk about insult on injury. Gotta love the lobbying that allows that.
Is that part of the contract that if the business is shutting down or laying people off that they need to continue to pay for things for you? I don't see why there's any obligation.
I understand what you're saying, but I think you may be missing my point, which is: Jeff Bezos's reputation is damaged by this. I will not work for anything he touches because I don't think he's behaving decently.
So he already put up and risked his personal money to even start this venture and it failed and you're saying he should continue to lose money on a failed investment even though these people will receive unemployment insurance that his business already paid tax into to fund?
Startups are risky and even though you work at one, I don't think they're for you.
There's plenty of other union labor jobs with pensions out there that seem to be more your speed. Your position isn't a reasonable one.
You want to have your cake and eat it to. All the rewards of being an early stage startup employee without any of the risk or skin in the game.
Why is it a requirement to have "skin in the game"? What does that even mean?
The risk to an employee at a company that got $250 million should only be accepting options that could be worthless in lieu of a portion of salary. There absolutely does not need to be any risk of losing healthcare, lacking severance, or any other loss of benefits. Founders want you to believe this but it doesn't have to be true.
The risk of joining a venture backed startup is that no new money comes in and there is no exit and you are out of business in a matter of weeks, like what happened here.
This is constantly looming over your head and used to be something understood by startup employees before the era of zero interest free money and "startups are kewl".
Any money raised got spent, otherwise they didn't need to raise it.
The trade off to take on the risk of being underpaid and possibly soon-to-be-unemployed by a startup are the potential equity payoff, the work environment and the human-networking. And it's usually worth it because you're buoyed by the local startup community and the high chance you get another job with people you know tomorrow if things don't work out.
The problem here is that our industry is flooded with the types of people who would otherwise have become lawyers or finance people because they chase comfort and status as opposed to a desire to work on cool shit with cool people. It kind of makes me hope these conditions extend for a while to weed out the people who don't belong and we can get things back to relatively-normal.
what that "skin in the game" means is that you are participating and take on some of the risk.
"why it is a requirement" has nothing to do with the law, the whims of "the founders", etc.
why it is a requirement is an economic truth - if there are enough players that believe that a gamble on working for an early stage startup is worth taking on some substantial, but perhaps not ruinous, risk, then that sets the bar.
> Founders want you to believe this but it doesn't have to be true.
Whether that is true, or "has to be true" depends only on the market. It certainly seems that it was true very true and probably still is. But neither you, the law, nor the founders have any control over whether it is worth it at the moment in your situation.
>Startups are risky and even though you work at one, I don't think they're for you.
Fortunately, there are many startups whose leadership is prosocial enough to try to offset some of the risk to its employees.
Since you seem like a Chicago School kinda guy, I'll put it in terms I think you can understand: employment is a market, and I am fortunate enough to have a optionality. It's bizarre that you fail to recognize that; it's pretty critical to your own analysis.
You could easily rewrite this comment to be about child labor in coal mines and textile mills. At the end of the day people are starting to expect certain basics from businesses considering places like In n Out are now offering benefits packages, and its about time we also enforce certain standards. If that raises the cost of doing business, so be it. I expect the business would be even more lucrative if you didn't have to pay your employees at all but that's not a good argument for exploiting the worker.
Boilerplate vapid moralizing nonsense. Are you assuming there's some magic stockpile of millions upon millions hiding somewhere that could be used to sever all of these people? You've already been told this is fantastically unrealistic for a startup bankruptcy. Unless you can suggest where to find the funds, you need a reality check.
Well, back in the old days, they did just that and called it a pension plan. Takes a little foresight and is too little too late for convoy of course, but these things can be planned for too but clearly the worker is not prioritized in these ventures.
There's been some pretty clear suggestions up thread on where to find the funds, namely "several months ago in the past". To be more clear:
The business (Convoy) should have shut down in e.g. August of 2023 when it was clear that they still had enough cash to pay out severance and still cover the expenses of winding down the business. They did not take this option, choosing to instead risk it all that they could bring in an infusion of cash without firing folks.
This is not "boilerplate vapid moralizing nonsense"; to take such a risk when you have a company of 500+ employees is a poor business choice.
This is not normal behavior for any company, and you should run away from anyone trying to convince you otherwise. The people responsible should be treated like pariahs.