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It took precisely three weeks from the time Yelp withdrew its earnings guidance to investors to its announcement of massive layoffs. That’s how fast this pandemic is affecting even healthy businesses.
Before March, Yelp’s biggest problem had been that it wasn’t profitable enough. It spent 2019 tweaking and trimming, improving its finances. It had generally succeeded. When I checked in on the company early last week, a Wall Street analyst told me Yelp “should be okay.” After all, it had a healthy business and more than $400 million in the bank.
Yelp will most likely still be okay, provided the U.S. doesn’t shelter in place indefinitely. Even as CEO Jeremy Stoppelman told employees in a Thursday blog post about large-scale layoffs, the company disclosed to investors that it now has nearly $500 million in cash and the like on its balance sheet. The San Francisco company let go of 1,000 employees and furloughed another 1,100. That’s about a third of the workforce, and others will see their pay reduced or work hours trimmed.
The collapse of interest Yelp has experienced, as measured by page views and searches, is a proxy for the larger shutdown of a modern economy. In the blog post, Stoppelman said traffic in its restaurant category fell 64% since March 10. Gyms are down 73%. Salons and other beauty businesses are off 83%. (Jovial comments about buzz cuts or learning our colleagues’ true hair color are suddenly less funny.)
Communicating all this is so difficult for business leaders. There was much overlap in the information contained in Stoppelman’s letter and the company’s securities filing. But there were differences too. In the letter, the CEO said Yelp had “cut server costs, deprioritized dozens of projects, and redone our budget based on ensuring company survival (instead of growth).” In a perhaps too-hopeful note, he said he had “no doubt that ultimately we will come out of this stronger and more prepared to deal with the peaks and valleys” that lie ahead. In the filing, the company worded things a bit differently. Yelp said it is “actively exploring” additional ways to preserve cash, increase liquidity, and protect the business. It believes “the demand for its products and services will rebound as local economies recover.”
How long that takes and how strong it’ll be is anyone’s guess.
Adam Lashinsky
This edition of Data Sheet was curated by Aaron Pressman.
NEWSWORTHY
Protection is not a principle. As Amazon workers continue agitating over the safety of their working conditions, the company says it's gearing up to create a coronavirus testing protocol for its warehouse workers. After distributing masks and instituting temperature checks, "a next step might be regular testing of all employees, including those showing no symptoms," Amazon said in a blog post.
😂🤷♂️😎. The Unicode Consortium, which oversees emojis, has announced that no new emojis will be released in 2021 due to the COVID-19 outbreak. This year's cast, including bubble tea, gender-inclusive Santa, and woolly mammoth, were selected before the pandemic hit and should become available this fall. The deadline for submitting ideas for the next set has also been extended until Sept. 1, so don't dilly-dally with yours.
Shh. Some tweaks in the app world. Facebook added a "quiet mode" to squelch notifications. Google renamed Hangouts Meet and Hangouts Chat to Google Meet and Google Chat. Google also created a virtual braille keyboard for Android phones (it's kind of amazing!).
Don't ever take sides with anyone against the family again. Moving on to the world of copyright tweaks, France is the latest European country trying to pressure Google to pay news organizations for including them in search.
Teacher's pet. And finally, keeping up with the Javier Soltero beat, the Google exec whose name does not end with an 'n' tells Bloomberg that Google Classroom has doubled its number of active users to 100 million since the beginning of March.
FOOD FOR THOUGHT
Apple may be the world's most profitable company, but not everything is perfect in the ranks of the iPhone maker's workforce. A group known as Information Systems & Technology, or IS&T, comprised mainly of contractors who make internal tools and software, "is a Game of Thrones nightmare," BuzzFeed reporter Alex Kantrowitz reveals in an excerpt of his new book about the largest tech companies.
“There’s a Cold War going on every single day,” Archana Sabapathy, a former IS&T contractor who did two stints in the division, told me. Sabapathy’s first stint at IS&T lasted more than three years, the second only a day. Inside the division, she said, contracting companies such as Wipro, Infosys, and Accenture are constantly fighting to fill roles and win projects, which are handed out largely on the basis of how cheaply they can staff up to Apple’s needs.
“They’re just fighting for the roles,” Sabapathy told me. “That’s all they care about, not the work, not the deliverables, the effort they put in, or even talent. They’re not looking for any of those aspects.”
FOR YOUR WEEKEND READING PLEASURE
A few long reads that I came across this week:
Olympic Icon Flo Jo Raced To The Top and Took Us With Her (Zora)
Beyond the nails, one-legged tracksuits, and world records, Florence Griffith Joyner set the stage for women to build million-dollar brands.
The Long Beach Model (City Journal)
Bucking California trends, the port city remains devoted to a middle-class economy.
The Weirdly Enduring Appeal of Weird Al Yankovic (New York Times Magazine)
National economies collapse; species go extinct; political movements rise and fizzle. But — somehow, for some reason — Weird Al keeps rocking.
They Led the Cult of Remote Work. Now We’re All Members. (Marker)
It only took a pandemic for us to live in Jason Fried and David Heinemeier Hansson’s remote work fantasy.
IN CASE YOU MISSED IT
Streaming church, Zoom seders: How coronavirus has pushed Easter and Passover services online By Robert Hackett
Facebook gives users a way to take a break from notification hell By Danielle Abril
From NBA2K to eNASCAR, are e-sports the new, well, sports? By Chris Morris
Dean of Stanford Medicine: How virtual care can make medicine even more human By Lloyd B. Minor
(Some of these stories require a subscription to access. There is a 50% discount for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.)
BEFORE YOU GO
If you are looking for some humor in our current situation, and who isn't, then you may be encouraged to learn that Saturday Night Live is planning to air a new show this weekend while abiding by all social-distancing guidelines. Here's hoping Lorne Michaels and crew can take our minds off of coronavirus for at least a little while. If that's not your thing, Apple TV is the latest streaming service to make a bunch of its shows available for free. Have a great weekend.
Aaron Pressman
