Techstars Announces 17% Workforce Reduction, Discontinues Programs Sponsored by J.P. Morgan

Techstars has announced a reduction of its staff by 17% and plans to terminate its $80 million Advancing Cities Program, financially supported by J.P. Morgan, after the full allocation of funds by the year’s end, as revealed by TechCrunch.

Initiated in 2022, the Advancing Cities initiative introduced accelerator schemes in various US cities such as Oakland, New York, Miami, and Washington D.C., aiming to support a more diverse range of entrepreneurs.

The backing by J.P. Morgan was intended to last until December, yet tension between the financial institution and Techstars emerged soon after the program’s inception, according to a previous TechCrunch report. A commitment renewal from the bank was anticipated last summer to enable Techstars to initiate a new round of fundraising for future investments targeted for 2025, which did not materialize by the allocated deadline. By February, uncertainties lingered concerning the employment status of approximately 20 Techstars staff members associated with the initiative.

The shutdown of the program was officially confirmed in a recent report by The Information on Wednesday.

Via email, Techstars’ co-founder and CEO David Cohen communicated to the team that the accelerator had expanded its team extensively. He noted that the majority of the job cuts would affect those in engineering, support, and sales and partnerships sectors, but clarified that key managers of most accelerator programs would be retained, with the notable exception of those involved in the Advancing Cities Program under the J.P. Morgan partnership.

This announcement occurs in a year marked by significant changes at Techstars. Maelle Gavet left her position as CEO of Techstars in May, prompting the return of Cohen to the leadership role. This layoff announcement follows a previous workforce reduction of 7% in January, as reported earlier by TechCrunch.

Under Gavet’s leadership, Techstars sought to expand its scope and support a larger number of startups, a strategy that faced scrutiny from the investment circle as the company initiated a restructuring process earlier this year. Cohen, in a communication to employees, underscored a strategic pivot from focusing on expansion to enhancing daily support and value for entrepreneurs.

Techstars has opted not to comment further but referred to the detailed email from Cohen, which has been made public on its newsroom site.