A Year of Turmoil: From Series D Fundraise to Layoffs
Around a year ago, Tier Mobility was on top of the micromobility game. The company had just secured a $200 million Series D fundraise in October 2021 and was expanding rapidly through acquisitions. In November 2021, Tier acquired Nextbike, a German bike-share startup, to expand its offerings beyond e-scooters. This move gave Tier access to the US market, where it also purchased Spin from Ford in March 2022.
However, today, Tier is facing another round of layoffs. The company announced that it will be letting go of around 80 workers, some of whom are under the Nextbike umbrella, due to redundancies resulting from previous restructurings. This move affects 7% of Tier’s overall staff headcount and comes on the heels of a similar layoff in August, where 180 employees were let go.
The Restructuring: From "All-Out Growth" to "Profitability First"
Tier’s CEO and co-founder, Lawrence Leuschner, stated that this round of layoffs is part of a pivot in the company’s overall strategy. Tier is moving from an "all-out growth mode" to a "profitability first" mindset. This change in direction comes as the macroeconomic climate has affected most tech companies, including micromobility operators like Bird.
The restructuring will include the closure of a small number of cities where Tier does not see a path to profitability due to factors such as unfavorable regulatory approaches. The company did not specify which cities it would exit, but the future of its operations in Paris is currently uncertain. The city’s strict regulations may make it unprofitable for Tier to continue operating there.
Side Projects and Services Cut
As part of this pivot, Tier will also be shutting down a number of side projects and services. These include:
- Vehicle design program: Tier will no longer be investing in its own vehicle design program.
- Tier Energy Network: The company’s plan to place charging stations in retail stores to incentivize riders to swap scooter batteries for rewards is being wound down.
- MyTier: Tier’s monthly scooter subscription service will also be discontinued.
Spin’s Restructuring
Spin, a subsidiary of Tier, has already made significant changes to ensure its long-term future. Philip Reinckens, CEO at Spin, stated that the company is confident that measures to increase revenue while reducing costs via further integration with its parent company will accelerate its path to profitability.
Micromobility in Limbo
The micromobility industry is facing a tumultuous time, with many operators struggling to maintain profitability. The city of Paris’s strict regulations and Tier’s decision to exit some cities may indicate that the company is prioritizing profitability over market share.
Key Takeaways:
- Tier Mobility is laying off around 80 workers due to redundancies resulting from previous restructurings.
- The company is pivoting from an "all-out growth mode" to a "profitability first" mindset.
- Tier will be closing some cities where it does not see a path to profitability.
- Side projects and services, including the vehicle design program, Tier Energy Network, and MyTier, are being wound down.
Related News:
- FAA had to divert flights because of SpaceX Starship explosion
- Nvidia releases more tools and guardrails to nudge enterprises to adopt AI agents
- Polestar digs in for another grim year