Kickstarter to cut up to 45% of employees due to COVID-19

The coronavirus crisis has hit Kickstarter. The crowdfunding platform will lay off up to 45% of its staff due to a sharp reduction in revenue.

According to Gizmodo, in April, the number of new projects on Kickstarter decreased by 35% year-on-year. The cause was the COVID-19 pandemic:

• a number of projects on the site have lost funding or suffered due to remote work;
• backers are also investing less and less money, as they themselves are experiencing difficulties in quarantine.

Two weeks ago, Kickstarter started looking for ways to solve the problem. The company’s “financial cushion” was depleted even before the coronavirus, so there was talk of layoffs. The management discussed options (such as reducing managers’ salaries or limiting the size of the staff) with the OPEIU trade union.

Nevertheless, yesterday the union announced the impending dismissal of a maximum of 45% of Kickstarter employees. The management notes that some employees leave on their own. The company will pay 4-month severance pay and six-month medical insurance to all those who have been cut.

Kickstarter also notes that if things get better after COVID-19, the company will take back all the dismissed employees. But so far she is not making predictions about how soon backers will start bringing money back to the site.

Note that last year, $16.3 million was donated to video games on Kickstarter. This is only 3% more than in 2018.

Also on the topic:

• Backers Invested $16.3 million in Video Games on Kickstarter in 2019Pathfinder: Wrath of the Righteous scored a million dollars on Kickstarter in a little more than a week
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