Shared Mobility Giant Tier Takes a Hit with 22% Workforce Downsizing

2023 has been a really challenging year for companies into small-scale transportation, like Tier, a German micromobility company.

tier layoffs
tier layoffs

The CEO, Lawrence Leuschner, shared that to navigate tough economic times and make the company profitable, they’re letting go of 22% of their workforce.

Tier, with a workforce of around 1,000 employees, is trimming approximately 200 jobs through the layoffs.

It’s not just Tier facing difficulties; many similar startups are struggling to get investment, and some have even gone out of business.

For instance, a Dutch e-bike company called VanMoof went bankrupt and got bought by a British tech company. Also, a Swedish electric truck maker and a Berlin-based e-scooter startup declared bankruptcy. Tier itself had a rough patch earlier this year when talks about it being acquired by competitors fell through, and it had to secure funding from existing investors.

Leuschner, in a LinkedIn post, acknowledged that it’s a tough day after a tough year. He mentioned that the decision to cut jobs was not about the performance of the employees but was necessary due to external challenges. The cuts will mostly affect the central and regional workforce, with the majority in central roles.

Despite the difficulties, he praised the departing employees as passionate and driven individuals who contributed a lot to the company. Earlier in the year, Tier also saw its co-founder and CTO leave for personal reasons. It’s a tough time for the micromobility industry, but Tier hopes these steps will get them closer to profitability.

Red the full post:

It has been an incredibly hard year for the majority of entrepreneurs, start-ups and scale-ups. This also applies to us at TIER Mobility. High inflation and the cost of living crisis have dominated the news in 2023, and the knock-on impacts of reduced consumer demand and confidence makes for a difficult business environment.

Nearly every business that was previously focussed on growth and expansion has written or spoken about the sharp pivot we’ve had to make to focus on profitability. Unfortunately, these things can’t happen overnight – it takes time and a lot of effort to change track. 100% of the company focus has been on execution to profitability  – working with every employee at TIER to reduce our operational losses and work towards profitability.

We have made insane progress on this in a short space of time:
– As a group, we improved our EBITDA from -63% in 2022 to be on track for -15% in 2023.
– We achieved profitability for the last 5 months
– For 2023, we anticipate we will be profitable on an annual basis for 80% of our markets, including some of our largest – Germany, the UK and France.
– We managed to make our ebikes a success, achieving profitability for this vehicle in 2023. It’s not about scooters, it’s about micro-mobility as a whole

A huge thank you to everyone who has worked on this – it’s been a lot of hard work and long days.

But we haven’t made it to profitability yet, which means there’s still more we need to do and decisions we need to make for 2024. With not enough visibility on how and if markets will recover, we have to presume demand in 24 will look like demand in 23. This means that to get to profitability, we need to bring our cost base down.

Unfortunately, this means that we will be making layoffs in a number of countries today – roughly 22% of our combined Central and Regional workforce, with the majority of affected roles sitting centrally.

It is a difficult day at the end of a difficult year. Everyone has worked incredibly hard to get us much closer to profitability, but the external factors have just limited what we could achieve.

The people leaving us today are extremely passionate, driven individuals who will be an asset to any company. The decision we have made today has nothing to do with their performance and should not detract from how much they gave to this company.

I remain truly grateful to them for choosing to join our mission to change mobility for good and I want to thank them for everything they have done for TIER.

Gerard Thompson
Gerard Thompson

Gerard Thompson, a seasoned tech industry worker understands the struggles of facing layoffs firsthand. Having navigated the uncertain and daunting world of job loss himself. Gerard is the founder of JustLayoffs.com

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