Carta lays off 10% of the workforce
Just got off company announcement, here are the key details:
- the departure affected 10% of the company
- 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)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...
-- tc article confusing - https://techcrunch.com/2023/01/10/carta-previously-sued-for-... --
"Visa holders get one 30-minute paid consultation with an immigration attorney" wow
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.
The attorney may have even paid the company. Getting 1:1 contact with hundreds of recently highly-paid clients that need your services is likely worth not only doing free but paying the company laying off for the privilege. The 30 minutes is enough for the commercial, not the actual services.
US residency being tied to employment is still so funny/ridiculous to me, as a non-American. What a raw deal for the immigrants.
What country doesn’t do this?
Yes, it kind of is a raw deal for immigrants. But it’s one of many things that suck for immigrants (look at the fees immigration attorneys charge). The exchange is that they typically get a 2-5x multiplier in earnings from their home country and consider it worth the risk.
It’s kind of like med school and residency. It really sucks and is difficult and is a “raw deal” yet everyone puts up with it because of the payout.
Most countries don't. American immigration is a mess with unknown delays and archaic processing techniques. Just because the employees get a 2x multiplier in earnings doesn't mean the immigration pain is worth it.
In a land of immigrants - having such a poor immigration process for highly skilled employees will only mean that the best and the brightest talent will no longer be interested in moving to the US when they could get treated much more fairly in other countries. The result will be the workforce will be filled with mediocre and sub-par talent who are willing to go through the painful delays in the immigration process.
> Just because the employees get a 2x multiplier in earnings doesn't mean the immigration pain is worth it.
The evidence of millions of people putting up with it refutes your statement. I think the immigration record in the US shows that people literally think the pain is worth it.
I don't know of any other country that does.
> US residency being tied to employment is still so funny/ridiculous to me, as a non-American. What a raw deal for the immigrants.
That is quite common, especially in the developed world. The US is a little stricter in the timelines and thresholds it applies, but not as much more as people seem to think.
Immigrants get a raw deal everywhere, especially immigrants from developing countries.
Not true for Canada and most of EU.
> Not true for Canada and most of EU.
I don't know where you get this idea but that is absolutely not the case.
For specialized work visas it certainly is.
There are also visa in the US that have nothing to do with employment.
I know lawyers can be verbose but surely it takes less than 30 minutes to say “you’re fucked”
Hey it's not "you're fucked!"
It's your fucked unless your true love decided today was the day to get married!
Companies often keep visa'd employees on payroll so they have more time to find another job. I personally feel this goes against the temporary intent of the visa, but it's a very common practice.
better than nothing, in my opinion. At least they were considered.
almost equal to nothing.
this is worth, like $500. would have looked better if they didn't even have this at all.
-- $500 is a lot of money --
it depends in which pockets you put the money
I'd consider this a blessing, tbh. Just the fact that there's an attorney on call that I can ask questions of, and I can talk to my friends who also talked to the consultant instead of hunting down an attorney for myself -- or more likely not and just going it alone and reading the documentation myself (I know guys who do this).
There's a lot of benefit here for those who need guidance.
Let's say there's 15 people with visas, they're probably going to have very similar conditions. The company pays a lawyer for two days of work, one full-time work day to look carefully into what options people with visa have, and another day to spend 30 minutes with each person individually to explain the situation and answer any question they might have.
If each individual goes to a lawyer and they want the same treatment, it's not going to cost them $500, it will cost them significantly more.
less than that. I see $250 as an hour for many immigration lawyers so this is like $125.
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.
Tell me you never dealt with US visa system without telling me you never dealt with US visa system
I've had at least half a dozen US visas (J-1, TN, H-1B, plus renewals, then EAD and now permanent residency). I would have appreciated this benefit if I'd been laid off.
The only tangible benefit would be to keep people on payroll instead of severance which would more than double the time they have available to find the next job
There's a new ruling for H-1B visa holder with I-140 approved.
Which nice but there are a lot of H-1B visa holders without I-140 approved
What's this new ruling?
I haven't, what about my point changes if I did. I acknowledged it's expensive.
I can tell you what your options are being on a visa for free. You dont need a 30 min consultation with an immigration attorney. Better benefit is instead of severance, keep employees on visa on payroll through that severance period.
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.
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.
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.
I think there's a legal difference between laying off employees "in bulk" by shutting down teams/divisions versus firing individual employees .
> (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.
How is saving costs not a justifiable reason? Maybe all of this is why European employees have such a hard time finding US salaries.
>How is saving costs not a justifiable reason?
Most likely because you could justify any firing to be "cost savings" and thus defeat the whole purpose of job stability.
Think about a tech company.. they could increase their staff by 25% for a year, using that team to advance products, meanwhile the new employees think they have a stable career on their hands.. but then the tech company is just like "nope, you are all fired". And they benefit into perpetuity for what the employees did while the employees are getting nothing more from that company and don't have a job.
Yes I'm oversimplifying, but that is part of what these laws are trying to avoid. It's unfair to the employees to have these mass hirings and mass firings with mass information asymmetry. In theory it would create more of a culture of "we hired you for the long term".
It is, but you cannot use it to fire a particular person. I mean, you get to choose who to fire, but if you need to hire somebody again for that position (because business is picking back up), you have to give the fired person the first option to come back.
That’s the most plausible reason I’ve heard so far tbh. I don’t know much about Europe but I’ve always been curious about the dismal salaries over there.
If saving costs was a justifiable reason how could literally any firing whatsoever ever not be justifiable?
How can "we don't have the money to pay you" not be a justified reason?
What about "We have the money to pay you but we don't want to anymore"?
No idea about this case. But often it seems they're cutting cost because they think they can, not because they have to.
Employee protection. Just because the management could not balance the sheet is not a good enough reason employees should suffer the consequences. At least in theory.
But if the company is shutting down a whole team without replacement, the employees should still get the option to relocate into another role. They can be let go only after that fails.
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.
My understanding is admittedly limited, but I do not believe companies are allowed to just make positions redundant in germany. Layoffs must be coordinated with the government and they basically look through your books and decide if you really need to lay these people off.
Germany's main requirement is that you have insufficient open positions in the company (not just same roles - no open positions at all, the company is obligated to train), and that you follow "social selection", taking into account "tenure, age, family responsibilities, severe disability". High performance can be justification to keep someone despite meeting the social selection criteria for termination, but low performance cannot generally be a reason for inclusion in the list of terminations.
If you are legitimately downsizing it is pretty easy. If you are trying to use "layoffs" as cover to cut the bottom x% of performers, you'll hit trouble.
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.
According to this, there can be economic justifications for layoffs in France. But it looks like there is a mandatory severance of 12 months.
https://www.safeguardglobal.com/resources/blog/terminating-a...
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?
I was about to ask the same thing. Why would someone leave voluntarily for worse benefits?
Suppose you wanted to leave. There are 2 choices:
A) Voluntarily leave and get some sort of severance.
B) Wait and gamble that the company decides to ask you to leave.
If you wait and are not selected to leave, you likely won't get any severance. So if you are angling to leave, it's safer to just take the package.
Great explanation. Probably where I am from there are more statutory or other costs involved in non-voluntary redundancy so it makes more sense to incentivise anyone to leave who wants to do so.
They want to bias the volunteers towards those who really don't like the company and those who haven't been there as long.
If a company over-hired in non-core areas during the last two years because valuations were high, they might want to shed non-core workers that they feel that they don't really "need". But they definitely don't want to lose the best people working on the core business.
The people who take voluntary leave are often the most able to quickly find a new job (i.e. the best people). So it is not in their best interest to incentivize that.
Probably aligns closer to the default onboarding package, rather than comparatively to this new layoffs package. Otherwise it makes no sense to me
Either way, I'm more curious about those airtight NDAs on the way out
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?
One of the founder's listed is Manu Kumar who has one of the longest Linkedin profile I've come across:
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.
Is there a way to view linkedin profiles without logging in?
I haven't figured out the sauce for this. It is definitely possible, but is not easily reproducible reliably.
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
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.
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
Most RSUs are double trigger and don't trigger taxes till an actual liquidity event
I think you'll find that they are rare like NCOs with long expiration dates.
Not here. Single trigger.
where are you getting the rev figure?
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.
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.
They fired and sued the CEO, which means they should probably have noticed something before having to fire 10% of the company.
CTO[1], not CEO. Still C-Suite, but not the top dog.
[1]: https://www.teamblind.com/post/Carta-announcing-layoffs-and-...
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
Why did this get removed from the front page so quickly?
2.5 months severance is pretty low compared to the other layoffs that have happened recently.
Elon disagrees
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
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.
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.
You sound entitled tbh.
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.
I've been waiting for the other shoe to drop for a decade.