Kickstarter Is Losing Nearly Half It’s Staff

The pandemic is affecting us all, and it’s Kickstarter’s turn to suffer the ravages of the global economic slowdown with a 35% drop in projects in the platform. As a result, up to 45% of the company’s workforce is facing layoffs.

Kickstarter Prepares to Shed 'Up to 45-Percent' Of Staff

Kickstarter has been transparent that, as a result of the pandemic, the number of fundraising projects on the platform is nowhere near normal. Today, the company confirmed to Gizmodo that shrinking revenues have forced it to drastically reduce staff.

gizmodo.com

The Verge has a copy of a memo sent out by Kickstarter.

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]I’d like to update you on the conversations we’ve all been having about how to keep Kickstarter well-positioned as we navigate what’s quickly become the worst economic downturn in a lifetime. As I shared a couple weeks ago, and again during last week’s All Hands, we’ve been looking at a number of possible scenarios. After great consideration, ongoing monitoring and modeling of our outlook, and consultation with our board of directors, here’s where we stand.

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As you know, although projects on the site continue to garner plenty of support from backers, we’ve seen many fewer projects launch on the platform over the last several weeks. The live project count is about 35% below what it was at this time last year with no clear sign of rebound. As a result, our pledge volume and revenue are tracking sharply down as well. Setting the business up for the future will require significant cost-cutting. Kickstarter is a small business of 140 people with modest operating margins, and all of the approximately $1.27 million in after-tax profit we earned last year has already been reinvested back into the business during the first four months of this year. With that in mind, we’ve undertaken a number of measures, including reducing compensation for a number of senior leaders at the company, including myself and the board of directors; instituting a hiring cap and policy to not automatically fill positions when people leave in order to limit headcount costs; and working to trim non-headcount budgets wherever we can.​

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The truth is, these measures aren’t enough for us to continue to serve creators during this crisis and beyond. We must look more broadly at ways to restructure the business, including potential layoffs across teams and at all levels of staff. Earlier today I reached out to OPEIU to share more about where we are, and to uphold our responsibility to negotiate next steps that involve members of the union. We expect to continue our discussions with the union over the next few days. In the meantime, please feel free to use our normal process and submit any questions you have for me here. The OPEIU reps are of course available to answer any questions members of the bargaining unit may have as well.​

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The uncertainty of this moment is stressful and I recognize you’re each shouldering some part of that. We’re going to navigate this thoughtfully and transparently to allay that as best we can. Kickstarter has an essential role to play for independent creators right now as a source of financial support. And the art, creativity, and innovation that they bring to life is essential to a healthy society — particularly during times like these. Many creators are also experiencing uncertainty and stress, so we’re going to make sure Kickstarter is here for them not just the next few months, but also the years ahead.​

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Thank you,​

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Aziz​

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Kickstarter plans layoffs after new projects on the site drop off by 35 percent

They’re now negotiating with the union

www.theverge.com

 

[Jester David]

As someone who has been laid off and will remain laid off for the next four months, I'm not dropping anything on Kickstarters for a while. (Or even new books, as I couldn't justify Wildemount and likely can't justify Theros.)

I imagine most creators know this is a terrible time. No one is going to pledge. Shipping is extra uncertain. Overseas manufacturing is backed-up. Even Hasbro is having to delay production.

And that's just on the gaming side of things. Board games would be worse. Technology even worse than that.
Kickstarter is going to have a really long time of rebuilding.

 

[pickin_grinnin]

I have done rpg projects through Kickstarter before. In fact, I'm getting ready to deliver on a ZineQuest project later this month. I have other products that I was planning on Kickstartering this summer, but I'm hesitant to do so now. A lot of people - including me - just aren't backing Kickstarters right now (for financial reasons), even if they are rpg products.

It might be different if I did D&D supplements or adventures. Those tend to be really popular, so you can potentially make some decent money even if fewer people are backing them. That's not my niche, though.

The problem is that Kickstarter doesn't have a lot of ways to incentivize people to take the risk. They could lower their fees temporarily, but they can only go so far with that, and the amount the creators would save probably still wouldn't make it worth the risk.

 

[Fanaelialae]

I suspect it's largely a matter of fewer people pledging.

Personally speaking, the company that I work for has thankfully not had to let anyone go, but in order to do so they had to cut everyone's salary by a little more than a third. So whereas under normal circumstances I pledge on KS fairly regularly, nowadays I'm sticking to spending on just the essentials like food and rent. I imagine it's the same or worse for a lot of people.

 

[Morrus]

I suspect it's largely a matter of fewer people pledging.

It's 35% fewer projects, not fewer pledges. Though presumably the former leads to the latter.

 

[Morrus]

The internal memo that The Verge obtained says that although projects are down by 35%, those projects on the platform are funding well.

"As you know, although projects on the site continue to garner plenty of support from backers, we’ve seen many fewer projects launch on the platform over the last several weeks. The live project count is about 35% below what it was at this time last year with no clear sign of rebound."

 

[Zander]

My sympathies to those affected.

@Morrus In the thread's title: "Its Staff", not "It's Staff".

 

[Cergorach]

Frosthaven just beat Kindom of Death: Monster's record with almost raising $13 million for a boardgame...

But as I noted a month and a half back in the "Onyx Path cancels LegendLore Kickstarter", it just totally depends who you are, what your peddling and who your peddling it to... Frosthaven can be played solo, it's also been mentioned for a long time so folks who wanted it, saved up for it for a long time. Other KS projects completely depend on if people currently have the money for it, are willing to spend it on the project and it's currently useful for them. For many people RPGs aren't going to happen for months because for them it's an in-person experience and not one enjoyed online. Others are already playing online or are willing to try playing online.

Some gaming projects are under-performing significantly compared to earlier, similar projects. Compared to Rising Sun, CMoN's Ankh under-performed by about a million dollars.

Personally I've only backed three projects this year (two CMoN board games and one 3D model project). Not only due to finances, but also due to just not having enough room to fit everything my mind finds interesting into my hobby room anymore (years of KS projects are arriving to fill it up). Also, some KS project creators are making changes to the pricing of their projects, either prices are going up significantly or we're getting less for the same price ($25 vs €50 for a core pdf). I'm also spending less on my other gaming (miniatures, boardgames, card games, etc.), I shifted form buying stuff to actually use stuff...

 

[MatthewJHanson]

That sounds rough.

I do suspect that games are probably doing better than a number of other categories, since its easier to do those remotely.

I have a project that I set a May start date for long before Covid hit. I debated moving it, but I'm going to go ahead. Partially because it has a low funding goal, partially because I am seeing plenty of game projects continue to succeed, and a little bit because I want to keep the platform going and don't want to see more layoffs in the future.