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Why Casper’s laying off employees
The company has been struggling financially in the wake of their unsuccessful IPO and the COVID-19 economic shutdown hasn’t helped matters. Casper shut down all of their retail locations and furloughed all retail employees last month.
The current layoff effects 21% of Casper’s workforce. All impacted employees in North American and Europe will receive severance packages including extended medical coverage, career coaching, and new job placement support.
Casper admitted to having financial difficulties ahead of February’s public offering. The company cut it’s valuation by 50% by lowering it’s expected price range to $12-$13 per share from $17-$19 per share.
Casper was one of the first “tech unicorns” – privately-held companies that are valued at over $1 billion. Many of Casper’s fellow unicorns are also laying off employees. As of this writing Bird, GetAround, ZipRecruiter, TripActions, Knotel, and Sonder have all announced rounds of layoffs.
Companies seem to be focusing on their home turf during the current crisis, which Casper is showing by cutting their European staff to focus on their home North American market (the company’s headquarters are in New York).
The mattress industry has been particularly cutthroat in the past decade. This lucrative business is a cash cow and is filled with startups that are trying to gain market share through generous return policies and incentives. Startups like Casper, Saatva, and Puffy are competing with each other while also battling legacy retailers like Mattress Firm and department stores who are able to substantially discount their mattresses in an attempt to compete with the new “mattress-in-a-box” brands.
The coming recession/depression is going to determine which mattress disruptors are actually well-run businesses and which ones were able to get by with investor financing and flashy marketing campaigns. Here at Sleepline we’re expecting that at least a few of the popular internet mattress companies will go out of business in the next year.