Quirky, the New York City startup with the goal of “making invention accessible,” announced to its employees Friday morning that more layoffs could be on the way as it struggles to raise additional capital, the company confirmed to Business Insider.
Company spokesperson Tiffany Markofsky said in an email that Quirky is considering an additional reduction in headcount and other cost cuts to support the growth of its Internet of Things subsidiary Wink.
Quirky CEO Ben Kaufman delivered the message to New York based employees at a meeting and remote employees via a memo seen by Business Insider.
“In an attempt to preserve our employees’ jobs and the future of the Company, we along with our investors have been actively pursuing several opportunities to raise the capital needed to maintain our business and avoid having to make staff reductions,” he writes. “Unfortunately, we have not been able to obtain sufficient funding to enable us to continue to operate our business at the current levels of staffing.
Unfortunately, we have not been able to obtain sufficient funding to enable us to continue to operate our business at the current levels of staffing.
Therefore, we must conduct a further reduction-in-force, which includes employees who work remotely and report into our New York City office.”
Layoffs are not happening now, but are expected to occur between Friday, July 31 and Friday, August 14. They could be avoided if Quirky or Wink succeeds in raising a new round.
The company’s fundraising has been complicated, in part because Quirky has two businesses: Its invention platform and the smart home platform Wink. Because of the lack of synergy between the two businesses — both of which are unprofitable — Quirky tried to sell Wink earlier this year. Those efforts ended after the company had to do an expensive nationwide recall of its Wink products because of a “completely preventable” security error.
Last week, Kaufman told Fortune’s Stacey Higginbotham that Quirky had $US12 million left in the bank and planned to either raise “no less than $US15 million” for Wink, raise enough money for Quirky to support both businesses, sell Wink, or sell both Wink and Quirky.
“I hope I can count on you to continue working hard and I can assure you I am working just as hard to secure the funding we need,” Kaufman’s memo closes.
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