Business

Brazilian startup Neon layoffs staff and EventBrite closes operations in Brazil

Coronavirus crisis is affecting Brazilian startups and as a response companies are promoting layoffs, such as Fintech Neon, or even closing operations.

Coronavirus crisis is affecting Brazilian startups and as a response companies are promoting layoffs such as fintech Neon. Photo: Neon

The coronavirus crisis is affecting Brazilian startups. Companies are promoting layoffs or even closing operations. Fintech Neon and the American startup of events Eventbrite used LinkedIn to report job cuts, according to Estado de S.Paulo. Other Brazilian startups such as unicorn Gympass, C6 Bank, MaxMilhas and Creditas also fired people in the recent days.

Neon, which operates a digital bank in Brazil, said it had made an “adjustment of less than 10%” in its staff, which was around 700 people. Headquartered in São Paulo, the company growth spiked in 2019, with 500 new employees. Part of the growth was supported by an investment made by Banco Votorantim and the American fund General Atlantic.

READ ALSO: Neon targets Brazilian micro-entrepreneurs by acquiring the startup MEI Fácil

American Eventbrite closed its operations in Brazil last week. Responsible for a ticket sales and management system that could be used by event organizers, the company had about 50 employees in the Latin American country.

It’s even more difficult for companies like Eventbrite to keep operations in other countries and cities where it’s not headquartered. As TechCrunch analyzed, satellite offices are secondary to a startup’s headquarters by nature. Opening smaller offices is a strategic move when a company gets a fresh round of funding or wants to expand to a new market.

Therefore, while most layoffs are coming from companies whose headquarters are located in the main entrepreneurial hubs, the actual staff members are located in the satellite cities, according to data from Layoffs.fyi, a tracker created by former Y Combinator grad Roger Lee.