The union for Kickstarter employees reached an agreement with management on Friday which provides protections for laid-off workers, the union said in a press release. The crowdfunding company announced in an internal memo April 20th it would likely seek layoffs, along with other cost-cutting measures. CEO Aziz Hazan wrote in the memo that Kickstarter had seen a 35 percent drop in new crowdfunding projects on the site in the past several weeks, with “no clear sign of rebound.”
Kickstarter United, the union that represents 60 percent of the company’s 140 employees, said the agreement includes four months of severance pay for all laid-off employees, a release from any non-compete agreements for anyone who accepts severance, and recall rights for one year. The company will continue healthcare coverage for any laid-off employees for up to six months, depending on salary.
Kickstarter spokesperson David Gallagher said in an email to The Verge on Saturday that the company was offering voluntary buyouts to union members, which includes the ability to opt out of health insurance coverage and receive partial payment instead.
“We need to put Kickstarter in a stronger position to ride out this uncertainty so it can continue to support its mission, which is to help bring creative projects to life,” Gallagher said. He added that non-union employees were receiving a similar offer. Once the company knows who is interested in a buyout it will be able to determine how many layoffs may be required, Gallagher said.
Kickstarter workers successfully voted to unionize in February. They’re represented by the Office and Professional Employees International Union (OPEIU).
Hasan said in the April 20th memo that Kickstarter brought in $1.27 million in after-tax profit last year, which has been reinvested back into the business. He mentioned other cost-cutting measures besides layoffs, including a reduction in senior management salaries and not hiring for some vacant positions.
“While we are disappointed with the layoffs announced by Kickstarter management, we are proud to stand shoulder-to-shoulder with our entire union family in this multifaceted fight for our families’ futures, and thankful for Kickstarter management’s willingness to negotiate a fair deal for their impacted employees,” OPEIU President and Local 153 Business Manager Richard Lanigan said in a statement.
The union said layoffs may include up to 45 percent of Kickstarter employees, but Gallagher said the company “hasn’t made any statements about the potential scale of the layoffs.”
UPDATE May 2nd 10:45AM ET: Added comment from Kickstarter and statement from OPEIU representative.