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Remember $5B startup that laid off mostly white guys with $$$ but didn’t give women/POC that option and increased their workload/cut pay instead? Meet @toasttab board: @steve_fredette @kentbennett @davelyuan @LeadEdgeCapital @BessemerVP @TCVTech + folks not on Twitter. Read on!
In February, @toasttab raised $400m, bringing their total to $902m. Two months later, they laid off 50% of their workforce. https://pos.toasttab.com/covid-19-impact-ceo-letter
During the layoff, @toasttab laid off ~81 FIEs (field implementation engineers; data from http://layoffs.fyi/ ), retaining ~41. Of those laid off, ~66% were white males versus ~35% of retained (using public @linkedin photos/name, with a double-blind rating agreement of 100%).
Clearly @toasttab put effort into equitable hiring; the original team appears to have been ~50% POC/women. And it is possible @toasttab differentially retained people because they wanted to “protect” them. But increasing hours and reducing wages without choice isn’t protection.
Normally, you allow employees you want to retain to choose to stay or take the same severance as those who leave. @toasttab didn’t do that. Instead, they eliminated the FIE position and created a new one, then forced retained employees into that position (via announcement email).
The new position was salaried (instead of hourly), which resulted in a significant reduction in overall compensation. It also eliminated overtime; @toasttab had already been successfully sued for not appropriately dealing with overtime for this position. https://martinvtoastsettlement.com/Home/portalid/0
Now retained women/POC employees were working much longer hours (because of fewer staff), for less pay, without the choice of severance. It is easier to see why that’s a problem at the extreme: imagine laying off CEO with a $1M severance, then making COO a janitor at $1 an hour.
I got involved because one of my mentees mentioned she was leaving her job. When I learned why, I suggested she contact @toasttab HR and coached her on her emails. Not offering people a choice was a problem; splitting along race/gender was an even bigger problem.
HR @toasttab refused to offer the package Mentee’s white male colleagues got and instead offered her substantially less. So pro-bono lawyer expressed Mentee’s desired outcome in legalese: give all retained workers the choice - same package or stay. A simple fix for the mistake.
Lawyer @toasttab rejected proposal. They increased Mentee’s offer but not to same level as white male colleagues. Why not put actual offer numbers? Because they make employees sign NDA on comp data. We asked, they refused to remove; even pay severance in chunks to prevent leaks!
My initial try at public accountability failed to get @toasttab to rethink this. Apparently, 7.7K likes and a reiteration of the desired outcome wasn’t enough for them. https://twitter.com/mattwallaert/status/1263511876878561281?s=20
Mentee now had a dilemma. She wanted to make sure @toasttab colleagues got the choice they should have, but didn’t feel ready to lead a class action lawsuit. She could choose not to sign the offer but she was already covered by NDA and they would just keep the money.
So Mentee signed, for much less than white male colleagues got. The money hasn’t been received yet (because remember, @toasttab believes it is so important to keep this quiet that they are breaking her payment into chunks).
Since I can’t know how much her severance is ( @toasttab NDA!), I’ve made a matching donation to HBCU @WSSURAMS of $4,255. If you want to help, these tweets are at http://Project4255.com , along with a donate link. Move decimal place to the correct place for you; even $4.25 helps.
And here we are. Mentee is gone. I donated. Her female/POC former colleagues go on working longer hours for less pay. And @toasttab has hundreds of millions in the bank, posting in support of #BLM and #EqualityForAll while exploiting their own POC workers. https://www.linkedin.com/posts/toast-inc_equalityforall-activity-6672272770526650369-N8da
What next? I can think of roughly three outcomes, although I welcome suggestions on other pathways.
1) @toasttab will do nothing publicly. They will not right the wrong, they will not pay Mentee, they will send me a cease and desist, lawyering will commence.
1) @toasttab will do nothing publicly. They will not right the wrong, they will not pay Mentee, they will send me a cease and desist, lawyering will commence.
2) @toasttab will publicly dispute the facts. This would be great, since I’d love to talk directly to them in a public sphere (I’ll review private communications later). That’s how inclusion actually gets better: transparency and accountability.
3) @toasttab will change their behavior. They will allow the retained FIEs access to the same package offered to their white male colleagues and let them choose to stay or go. And they will offer the same to Mentee, even though she is no longer employed there.
A few notes on this @toasttab thread, then I’ll try to devote additional tweets on the thread to answering clearly phrased questions; if it appears to just be debate/discussion, I’ll reply directly to the tweet itself.
Fact checking: The gender/ethnicity issue @toasttab was fairly easy to confirm, as cited earlier. For the comp changes/packages, @glassdoor reviews mention the change several times. https://www.glassdoor.com/Reviews/Employee-Review-Toast-Inc-RVW33197402.htm https://www.glassdoor.com/Reviews/Employee-Review-Toast-Inc-RVW33425747.htm https://www.glassdoor.com/Reviews/Employee-Review-Toast-Inc-RVW33517205.htm https://www.glassdoor.com/Reviews/Employee-Review-Toast-Inc-RVW32960776.htm
If @toasttab were to waive their NDA for all previous employees, we could have this discussion publicly; @ChrisComparato, the current CEO, could do that if he wanted to.
Financial impact: offering the retained FIEs the choice of retention or package, assuming a 50% uptake rate, would have cost far less than 1/400th of the money @toasttab took in just two months before.
Comms: I wrote to a ton of people @toasttab privately in an attempt to resolve, including founders, board members, investors, and execs in charge of both people and D&I specifically. I even used my connections to try to get intros. Even with that, I got four responses in total:
A @toasttab investor from a large fund (invested in only an early round, said they would reach but noted low leverage), an investor from a small fund (had no direct knowledge but said they would look into it), and…
...a @toasttab board member (who defended the company and accused me of besmirching the name of a bunch of good people doing their best; at least he responded, as other board members said nothing).
I also talked to one current senior @toasttab employee, who said they would raise it to Annie Drapeau (Chief People Officer), then went radio silent. One other board member and one other employee accepted my @LinkedIn requests but did not respond to messages.
Personal reflections: I shouldn’t have called the company out publicly as early as I did, as it just raised the stakes and caused everyone involved to clam up. I didn’t get responses before I tweeted either, so it didn’t change behavior, but still I regret it.
I also regret the deadline. It was right before a holiday weekend and I shouldn’t have said three days if I wasn’t willing to deliver on that; once lawyers got involved on all sides, I kept hoping @toasttab would just realize the problem and do the right thing, if I just waited.
This experience has made me reflect on myself as an executive. I’ve signed NDAs to protect IP and never questioned their place as a tool for silencing labor issues; clearly I need to update that practice.
I wish people wouldn’t make this about me - I am not blameless and have work to do. I’m tweeting because a) NDA and b) I have some followers and c) I’m a white dude. And whether we are willing to acknowledge it, no one would be reading if it was a young woman with no audience.
I don’t think this was an isolated incident; it may not even have been COVID-related, given that @toasttab was not profitable and rumored to be thinking about an IPO. Many companies are using COVID as an excuse to trim headcount.
And with that comes all the problems we already know about with women and POC in tech. D&I is coming last at a time when it ought to be coming first and I’m sure someone digging into the data could easily find more cases just like this one.
Press: Despite almost 8K likes on the tweet without @toasttab named, only one reporter reached out. Sharing this information publicly seemed right, although I did give the reporter these facts privately a few days in advance. If a reporter has questions, you can DM me.
But in reality, most of this is based on information already available on http://layoffs.fyi , @glassdoor, etc. It wasn’t hard to validate the story, once I started pulling on the threads expressed by Mentee.
Disclaimers: I have no financial interest in @toasttab or competitors. I’m not doing this to sell books (proceeds go to an endowment for URM in CS @swarthmore and @WSSURAMS) or gain followers. Please do follow @BariAWilliams, who lawyered entirely pro-bono.
Also instrumental were @karasilverman @adblanche @jmckenty @jenniferbrown @amylherzog who reviewed these tweets and helped me address my blindspots. I’m not famous for my subtlety, so to the extent this is successful, it is so because of them.
Names: Yes, I am specifically avoiding naming individuals. Why? Because what I really want is behavior change and I don’t believe shaming individuals helps in this case. Maybe they didn’t see my note. Maybe the board member knows something I don’t. This is where I am comfortable.
That said, using @crunchbase, here are all of the @toasttab investors on @Twitter: @BessemerVP @GVteam @8roadsventures @TCVTech @FPrimeCapital @TRowePrice @LeadEdgeCapital @GSquaredCapital @princeton_vc @AltaParkCapital. Investors must be accountable for what they fund.
But I couldn’t tag in most of the @toasttab founders, board members, and execs because they seem to not actually be on Twitter. Why do we let people guide almost $1B of capital and more than 1K jobs with no public accountability? Isn’t that dangerous?
I got plenty of trolling from the first post and I don’t even benefit from this situation; shouldn’t the executives who profit from lowering wages and increasing workload of these women/POC be the ones who have to answer for their actions and discuss their decision?
