Tier, the Scooter Startup, Slashes Workforce by 22% in Bid for Profitability

German micromobility operator Tier Mobility is laying off another 22% of its workforce to cut costs in the never-ending grind toward profitability, according to a LinkedIn post from CEO Lawrence Leuschner.

The hits keep coming for the micromobility giant, which sailed into 2022 on a high note. By March 2022, Tier had raised a $200 million Series D from SoftBank Vision Fund 2 and Mubadala Capital, and had acquired docked e-bike share company Nextbike, Wind Mobility’s Italian unit and Fantasmo, a startup building camera-based scooter parking validation technology. The micromobility giant also acquired Spin from Ford, a move designed to help the company break into the North American market.

Come August 2022, Tier would issue its first major round of layoffs, cutting 180 staff members amid a poor funding climate. Five months later, Tier laid off 100 people across the Tier and Spin brands. In May, Tier raised a convertible note to keep it running while it searched for a buyer, after acquisition talks with Bolt and Lime reportedly fell through. In September, Tier sold off Spin to Bird, another struggling micromobility company, for $19 million.

Today’s layoffs come as Tier reckons with what many startups and scale-ups have learned in the past year — growth and expansion is out, profitability is in. That means reducing operational losses, which can be caused by redundancies in the workforce.

In his post, Leuschner said Tier has been working tirelessly to get to profitability. The company improved EBITDA from -62% in 2022 to be on track for -15% in 2023. He also said he expects Tier to be profitable on an annual basis for 2023 in 80% of its markets, including Germany, the U.K. and France. Leuschner also said its e-bikes unit has been able to achieve profitability in 2023.

Despite some wins, Leuschner said Tier hasn’t “made it to profitability yet, which means there’s still more we need to do and decisions we need to make for 2024.”

“With not enough visibility on how and if markets will recover, we have to presume demand in 24 will look like demand in 23,” he wrote. “This means that to get to profitability, we need to bring our cost base down.”

The layoffs today affect around 140 employees. Tier did not respond in time to say which teams will be most affected by the layoffs, only saying the job cuts would be to the company’s central and regional workforce, “with the majority of affected roles sitting centrally.”

Tier has already said goodbye to a large handful of top staffers this year, including the company’s co-founder and chief technology officer Matthias Laug, who left in February, citing “personal reasons.” Others have also left in the last six months, including Tier’s head of engineering, VP of finance, SVP of corporate strategy and develop and VP of product and growth.