In latest tech layoff, Whoop’s workforce drops by 15 percent
Cofounder and chief executive Will Ahmed told the Globe in May that Whoop had over 700 employees (including co-ops and interns) and was on track to have close to 1,000 by the end of the year. As part of the recent cost-saving measures, Whoop has paused its co-op program.
Whoop joined Hydrow, another Boston fitness-tech company, in laying off employees this week. Hydrow, which sells a $2,495 rowing machine, slashed 35 percent of its staff on Monday. Over the past few weeks, tech firms including DataRobot, Notarize, Cybereason, and Desktop Metal have also laid off employees.
“Unfortunately, more layoffs are coming,” said Jeff Bussgang, a partner at Boston-based Flybridge Capital who is not an investor in Whoop or Hydrow. “With a higher cost of capital, startups are marshaling their cash and reducing their burn rates, which unfortunately means cutting headcount.”
Whoop sells a fitness wristband that uses sensors to track several health metrics, then uses an algorithm to calculate users’ daily strain, recovery, and sleep scores. The firm released the Whoop 4.0, the latest version of its fitness wristband, in September. Customers pay for the device via a $30-a-month subscription, which provides access to the Whoop smartphone app.
Whoop used to sell its wristband only directly to consumers, but in June it launched an enterprise sales business.
The company said it is not “slowing down or pausing” any of its “key initiatives.” It also plans to continue hiring “in the coming months.”
Ben Foster, who served as Whoop’s chief product officer for the past two years, was laid off this week but said he thinks cuts were the right move, since Whoop “relied on VC capital as rocket fuel to drive hyper-growth.”
“Reducing costs will extend the company’s runway and minimize the risk of requiring outside capital at a time when it’s inaccessible,” he said in an e-mail to the Globe.
Whoop was valued in September at $3.6 billion after raising $200 million in a round led by SoftBank Vision Fund 2. As of last November, when the tech industry’s competition for talent was in full swing, Whoop was paying software engineers right out of college around $105,000 in base pay.
Foster said layoffs made more sense than raising prices on its products, which could have caused the company to lose customers at a time when it has a “a larger member base than ever.”
“Despite the personal impact on myself and others, I’m glad the management team was willing to make a hard decision,” he said.