Tright here was such fanfare when Invoice Smith, founder and CEO of furnished house rental agency Touchdown, relocated the corporate’s headquarters to his hometown of Birmingham, Alabama, from San Francisco in June 2021 that a ceremony announcing Landing’s arrival featured Governor Kay Ivey, who provided tax breaks in change for Touchdown’s promise of 816 native jobs.
This month, every part modified. Touchdown laid off 110 folks as a part of a restructuring, together with 77 individuals who labored at Touchdown’s downtown Birmingham headquarters, representing about 30% of the employees there, Smith instructed Forbes by e-mail. In the meantime, Touchdown had beefed up its operations in Mexico Metropolis, the place wages are far decrease. The Mexico employees now represents greater than 100 folks, or roughly 20% of the corporate’s complete workforce, which Smith mentioned is about 500 staff following the layoffs.
For Birmingham, a metropolis of 200,000, every startup that chooses to relocate or arrange store there’s a large deal. Town, as soon as an epicenter of the metal business, has struggled to rebuild its downtown the place vacant heaps sit blocks away from financial institution headquarters and gleaming workplace buildings. Town was a stop on Steve Case’s Rise of the Rest tour in 2018 and has been working to lure extra tech corporations ever since. “Lots of pleasure about Touchdown within the Magic Metropolis,” CBS 42 anchor Sherri Jackson mentioned in a TV section on the time of Touchdown’s relocation.
There’s additionally a specific irony to Touchdown’s restructuring as a result of Smith, a Birmingham native, had lengthy been a giant Birmingham booster. A highschool dropout, Smith constructed his earlier enterprise, grocery supply agency Shipt, within the metropolis, and had helped discovered Birmingham Sure, a corporation designed to draw tech startups. “I’m actually captivated with Birmingham and making Birmingham a greater place to reside,” Smith instructed Forbes this summer season.
To lure Touchdown, the state of Alabama provided an annual refundable credit score of 4% of the brand new Alabama-only jobs payroll as a efficiency, pay-as-you-go incentive. The corporate could possibly be topic to clawbacks of these incentives if it failed to succeed in a minimal of 784 jobs in Birmingham by the tip of 2026, Alabama Secretary of Commerce Greg Canfield instructed Forbes by e-mail. Nonetheless, the Division of Commerce’s expectation is that Touchdown will proceed so as to add jobs within the state over time.
“The layoffs introduced have been represented as a restructuring of centralized operational positions into decentralized areas inside the markets Touchdown is serving,” Canfield wrote. “Restructuring on this method is just not an unusual enterprise follow and we count on Touchdown will return to job-growth mode in Birmingham over the near- to mid-term.”
Smith mentioned within the e-mail that he remained “assured” Touchdown may meet the long-term targets that had been set to obtain the incentives. “We stay deeply dedicated to Birmingham’s success and progress as an rising tech hub, and we worth the continuing partnership,” he wrote.
Smith, 36, made a fortune together with his earlier enterprise, on-line grocery supply service Shipt, which he bought to Goal
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Touchdown doesn’t personal the flats it rents, however leases them from mega-landlords like American Landmark and Northwood Ravin and outfits them with its personal furnishings and furnishings solely after a would-be tenant expresses curiosity. That on-demand enterprise mannequin retains Touchdown’s prices low because the empty flats are off its stability sheet, however it additionally raises operational questions on tips on how to deal with conditions the place would-be tenants need flats which might be not obtainable, in addition to tips on how to arrange and clear these flats effectively.
Former staff instructed Forbes the job cuts have been notably painful due to the speedy hiring in Mexico Metropolis. Touchdown’s managers traveled to Mexico to coach the brand new staff whereas its profession board listed open roles for home-quality specialists and customer-service representatives on the similar time the corporate was letting folks go. “All the pieces had been going to Mexico for months,” a former Touchdown worker mentioned.
Touchdown first arrange operations in Mexico in 2020 and a complete of 100 folks labored there previous to the restructuring, in line with Smith. As a part of the reorganization, he mentioned the agency created 14 new roles in Mexico and eradicated seven there. Whereas the corporate rents furnished flats on versatile leases in quite a few U.S. cities, and has been particularly in style in Sunbelt locales like Phoenix and Las Vegas, it doesn’t presently provide leases in Mexico Metropolis. “Our imaginative and prescient for Touchdown is to create a world model for versatile dwelling,” Smith wrote within the e-mail to Forbes. “As we’ve scaled the corporate, we’ve constructed a world workforce with staff in a number of nations, Mexico included.”
On the time of the layoffs, Smith mentioned that Touchdown’s income projection for this 12 months—$200 million, up from $83 million final 12 months—remained unchanged. The corporate, which Forbes profiled this summer season as a part of this 12 months’s Subsequent Billion-Greenback Startups record, raised $237 million in enterprise funding from Foundry Group, Greycroft and others at a current valuation of $475 million. Its most up-to-date spherical of funding occurred simply months earlier than the layoffs.