Andy Rubin's Essential confirms layoffs; sources say it's almost a third of its workforce, primarily from the startup's hardware and sales divisions
Some More Skepticism About Blockchains, Bitcoins, and What Not Cromwell Schubarth / Silicon Valley Business Journal : $100M later, Andy Rubin's cutting staff and looking for what's Essential Habeeb Onawole / Gizmochina : Essential lays off 30% of its workers across key departments Ina Fried / Axios : Andy Rubin's Essential cuts 30% of staff Paul Thurrott / Thurrott.com : Essential Lays Off 30 Percent of Workforce Ryan Whitwam / ExtremeTech : Essential Has Laid Off 30 Percent of Its Staff Abner Li / 9to5Google : Essential fires 30% of employees, focussing on ‘game changing consumer product’ Carly Page / Inquirer : Essential tells a third of staffers they are, er, nonessential PYMNTS.com : Essential Products To Lay Off 30 Percent Of Its Workforce Shawn Knight / TechSpot : Essential lays off nearly a third of its staff Timi Cantisano / Neowin : Essential lays off around 30 percent of its employees Evan Selleck / Android Beat : Essential Lays Off Nearly 30% of its Staff Tim / Droid Life : Essential Cuts 30% of Workforce Christian de Looper / Digital Trends : Goodbye, Essential? Android creator's startup cuts nearly a third of its staff Alexander Maxham / AndroidHeadlines.com : Essential Products Has Reportedly Cut A Third Of Its Employees Rose Behar / Android Police : Essential decides a third of its staff isn't Kris Holt / Engadget : Essential lays off 30 percent of its workforce C. Scott Brown / Android Authority : Essential drops 30 percent of employees, mostly from hardware and sales Brian Heater / TechCrunch : Essential lays off nearly one-third of its staff Chris Davies / SlashGear : Essential slashes staff in attempt to refocus Chaim Gartenberg / The Verge : Essential cuts 30 percent of workforce Alex Wagner / Android and Me : Essential reportedly lays off around 30 percent of its staff Tweets: Mark Gurman / @markgurman : Andy Rubin's Essential has cut 30 percent of employees today, after cancelling second phone, shelving home device, and putting co. up for sale earlier this year. Story on Terminal.
Context & Ripple Effects
Essential's layoffs cap a rough eighteen months for Andy Rubin's smartphone startup. Before shipping its first product, the company had already lost its VP of marketing and head of communications, and Rubin only resumed day-to-day control after returning from leave amid questions about his conduct at Google.
By spring 2018 the situation had sharpened: Bloomberg reported Essential was considering selling itself and had canceled development of a new smartphone. Cutting nearly a third of staff — concentrated in hardware and sales — reads as the execution step of that retreat, concentrating whatever remains on a single 'game changing consumer product' rather than a device lineup.
First-order effects
- Roughly 30% of Essential's employees, mostly in hardware and sales, lose their jobs immediately, gutting the functions a phone maker needs to ship and sell devices at volume.
Second-order effects
- With sales staff cut and a new phone already canceled, Essential's distribution shrinks to whatever channel the existing Essential Phone retains, pushing the company into a single-product bet where carrier and retail partners have little reason to keep shelf space.
Third-order effects
- The pattern — a nine-figure raise and unicorn valuation unable to sustain a full hardware organization against entrenched Android OEMs — points to well-funded entrants consolidating around one make-or-break product or exiting hardware altogether.
The trend: Consumer hardware startups backed by large funding rounds are retreating from full product lines to single bets as scale incumbents squeeze out sub-scale phone makers.