COVID-19, Small Businesses, and Us
by Marco Zappacosta
COVID-19 has changed the entire world in a matter of weeks. Our lives have been turned upside down. Our economy has been hit from all sides. Our healthcare system is being pushed to the limit. Too many people have gotten sick. And, far too many have died.
The heartbreaking illness of friends and loved ones is what we feel most directly. But, we are also feeling the damage to our economy.
Far too many businesses have closed. Far too many jobs have been lost. And, far more don’t yet know what their future holds.
Running a local service marketplace means that I have seen this economic devastation first-hand. Our pros — the painters, handymen, DJs, and math tutors — who support themselves, their families, and their communities are struggling to survive.
No community has been spared by this outbreak. There’s no area of the country or type of local service that hasn’t seen a dramatic decline since March 1st. And, some are seeing outright collapse. Across all Thumbtack services, San Francisco is down 61 percent, Detroit is down 55 percent, and New York City is down 50 percent. And, in terms of types of work hit the hardest, jobs for DJs nationwide have dropped 82 percent, house cleaning has dropped 65 percent, and interior painting has fallen 53 percent.
We have detailed data on impact across cities, industries, and job types nationwide that we will publish soon.
Small businesses in every town are hurting. And when small businesses are in trouble, we’re all in trouble.
Because Thumbtack’s earnings are tied directly to the prospects of American small businesses, our company revenue has declined dramatically in recent weeks alongside that of our pros. No business operates with enough of a buffer to sustain prolonged revenue declines of 40%+ without making radical changes.
That means we’ve had to do deep cost-cutting. Starting two weeks ago we dramatically reduced marketing spend, we implemented a hiring freeze, and we cut internal programs for employees.
Even with those cuts, however, the numbers didn’t add up. So we next looked at our own salaries. Starting today, I will take no salary. My executive team has also cut their salaries by 25%. And, we have asked team members company wide — those who are mid-senior levels and above — to reduce their pay.
After scrutinizing every expense in the business and cutting everything we could, the numbers still didn’t add up. So in such an unprecedented time, and with no other way forward, we made the incredibly difficult decision to part ways with 250 of our team members today.
In my time running this company, there has been no worse moment than this one — telling people I value and respect, who have contributed so much — that they no longer have a place at Thumbtack because of events completely outside of anyone’s control.
I am painfully aware that this decision will affect many people’s lives. These individuals are our friends — they built this company, side by side with us. There are many who’d been with us for 4, 5, 6 years. I am deeply grateful for their contributions.
We’re doing everything we can to help these team members. We’re providing each with severance packages that include both cash and equity components. We’re also doing what we can to help them find new jobs. If you are hiring, please let us know.
We’re also doing our small part to help our pros where we can. We are building features that support more remote work with customers — like video consults for a sink replacement that would typically be done onsite. And, we’re sharing research on how to best communicate with customers and best practices on how to perform contact-free work.
But this is only a drop in the bucket compared to what the government can and must do right now. We have been pushing and will continue to push for local, state, and federal programs and funding for these small businesses. To any policymakers out there doing work that affects small businesses, consider us an open data resource and partner to you as you develop plans. Let’s get them the help they deserve.
We are proud of our mission to put money in the pockets of small businesses. Like all of you, we look forward to the day when we can put all of this behind us.
As a company, we will fight through this challenge and come out on the other side. But, we wouldn’t have been able to do that without these measures taken today.
In the meantime, we thank our departing teammates from the depths of our hearts and will continue to fight every day in service of our pros and customers.
