New Kickstarter projects fall 35%, layoffs planned
Covid-19 is crushing crowdfundingBy Rob Thubron
In a nutshell: Few businesses are safe from Covid-19 disruption---even the crowdfunding industry is suffering. Kickstarter has seen its number of new projects fall by 35 percent year-over-year, and things don't appear to be getting better anytime soon. As such, the company is discussing ways of saving money, including potential layoffs.
In an internal memo seen by The Verge, Kickstarter CEO Aziz Hasan revealed the drop in new projects, adding that there was "no clear sign of rebound." Discussions are now taking place with Kickstarter's union organizers about potentially laying off staff.
Hasan wrote that while Kickstarter made $1.27 million in pre-tax profit last year, that money has already been reinvested back into the business.
Some of the cost-cutting measures Hasan is considering include reducing senior execs' salaries---including his own---restricting the number of new hires, not automatically filling newly vacant positions, and cutting the budget "wherever we can." But even with these changes, it seems layoffs are likely to happen soon.
"We must look more broadly at ways to restructure the business, including potential layoffs across teams and at all levels of staff," Hassan wrote.
Kickstarter has launched initiatives to try to get more creators to post projects on the site, including the Inside Voices program that encourages small, home-made projects.
As it has done with so many areas of life, Covid-19 has caused plenty of problems for Kickstarter campaigns. Many projects can't be completed remotely, deliveries and supplies are often affected, and with unemployment at an all-time high, many simply don't have the spare money to become a backer.