On Tuesday morning, around 100 TripActions customer support and customer success team members dialed into a Zoom call. Many joined the call happily smiling, expecting another team meeting or bonding activity amid the new work from home culture. Instead, according to people on the call Protocol spoke with, their boss launched into a spiel about the economy and coronavirus.
Then she announced that everyone on the call was being laid off.
"People were crying and people were panicking," said one employee who was abruptly let go on the videoconference. "It was like 100 different videos of just chaos."
The workers on that call represent around one-third of the people TripActions laid off on Tuesday. The company confirmed it let go of nearly 300 workers, around a quarter of the total staff, with layoffs hitting customer support, recruiting and sales the hardest, according to several current and former employees Protocol spoke with. "While we were fortunate to have recently raised funding and secured debt financing, we are taking appropriate steps in our business to ensure we are here for our customers and their travelers long into the future," TripActions said in a statement. "We've cut back on all nonessential spend and made the very difficult decision to reduce our global workforce in line with the current climate."
As the travel sector sinks, travel-related startups have laid off hundreds, from 34 employees at corporate travel company Lola to over 400 at Sonder, a hotel alternative that offers furnished apartments. And it's not just travel companies affected. Startups across industries, from cannabis to car sales, are laying off staff, and CEOs like Shift's George Arison are warning fellow founders to take action now.
But having everyone working from home has meant that all of the layoffs and staff cuts are happening virtually — and companies are grappling with how to deliver the message. Under normal circumstances, these hard meetings would happen in person, but amid the COVID-19 crisis, the best companies can do is video chat.
Though it's not clear there's a better way to deliver such awful news, the format caused TripActions employees pain. "Why would you get everyone on a Zoom and deliver that announcement?" the same laid-off employee said. "I'd invested so much in that place, and I feel so fucked over. That's why it's so frustrating. We didn't follow any of our company values today."
TripActions did all of its conversations over Zoom in groups, sorted by department or team, followed up by individual conversations with managers, the company said. Still, it was messy, according to several people Protocol spoke to on the condition of anonymity because company policies and severance packages prohibit speaking about company information to the press.
Employees who joined the calls late were confused about what was happening and whether they'd just lost their jobs. In the customer support chat, administrators had muted all employee videos, silencing any cries or expressions of anger at the layoffs. Workers surreally watched as everyone realized what was happening and began processing in their separate Zoom squares, some soundlessly crying.
TripActions says it's paying affected employees' salaries through April 1. They'll maintain health care coverage through April and will be covered with company-paid COBRA health insurance coverage through June. The company is also offering a minimum of three weeks salary.
TripActions employees Protocol spoke with felt blindsided as they joined the calls, despite the sector movement toward layoffs. The company had seemed flush, having previously raised around $480 million in venture capital from blue chip investors like Ben Horowitz at Andreessen Horowtiz and Lightspeed, according to PitchBook. In February, it also reportedly closed a $500 million debt facility to build out its corporate travel card, according to TechCrunch.
Founded in 2014 by Ariel Cohen and Ilan Twig, TripActions' main pitch was to be a better travel-booking platform for corporate travel, including a program that incentivized road warriors to choose cheaper hotels. In the wake of coronavirus, its chief revenue officer, Carlos Delatorre, told Protocol last week that the startup had been shifting its pitches to highlight things like its ability to track travelers in a snapshot around the globe. "You might think because of coronavirus and the resulting travel restrictions in place that the last thing organizations would be thinking about is corporate travel management, but it's quite the opposite," Delatorre told Protocol in an email.
That interest didn't quite translate into bookings, according to a current employee. TripActions' main revenue source came from corporate travel bookings, an area that has been hit hard in the wake of the spread of coronavirus as many companies have banned employees from corporate travel. The company's customer list online includes Lime, Yelp and Lyft — all companies headquartered in California, which faces a statewide shelter-in-place order.
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In an all-hands meeting last week, the company's CEO Cohen told employees that TripActions was facing uncertainty like a lot of startups and would have to cut costs. But the multiple current and former employees said that based on the tone of the meeting and what was discussed, they walked away from that meeting under the impression that layoffs would not be imminent.
By Tuesday, around a quarter of the company was gone.
