Techstars is making significant changes in its operations by laying off 17% of its workforce and terminating its $80 million J.P. Morgan-backed AdvancingCities program once the fund is fully utilized by the end of this year, as reported by TechCrunch.
Launched in 2022, the AdvancingCities program initiated accelerator programs in cities like Oakland, New York, Miami, and Washington, D.C. with the objective of supporting a more diverse group of founders.
The partnership between J.P. Morgan and Techstars took a negative turn shortly after the bank’s commitment through December, as outlined in a previous TechCrunch report. The bank failed to confirm its commitment last summer, causing uncertainty for around 20 Techstars employees involved in the program.
The closure of the AdvancingCities program was officially confirmed by The Information on Wednesday.
In an email addressing the layoffs, Techstars co-founder and CEO David Cohen acknowledged that the organization had expanded beyond its means. The majority of layoffs would affect engineering, support services, as well as sales and partnerships departments. Cohen assured that most accelerator programs would not be affected, except for those associated with J.P. Morgan, particularly the AdvancingCities program.
This announcement comes amid a period of change for Techstars, with former CEO Maëlle Gavet resigning in May and Cohen reassuming the role. Additionally, there was a 7% reduction in headcount in January.
Under Gavet’s leadership, Techstars aimed to expand its programs and support more startups, leading to criticism from the investment community. Cohen addressed these concerns in his email, indicating a shift in focus to better serve founders on a daily basis.
Techstars did not provide additional comments but referred to Cohen’s email which was published on its website.
