Techstars will lay off 17% of its workforce and shut down its $80 million AdvancingCities program by the end of the year.
Launched in 2022 with funding from J.P. Morgan, the AdvancingCities program aimed to support diverse founders through accelerator programs in cities like Oakland, New York, Miami, and Washington, D.C. Despite the initial enthusiasm, the partnership with J.P. Morgan faltered, and the bank did not commit to continuing the program beyond its initial funding term. This lack of commitment has left around 20 Techstars employees, who worked specifically on AdvancingCities, uncertain about their future.
A J.P. Morgan spokesperson confirmed that the fund would be fully deployed by the end of 2024 as planned and emphasized the bank’s ongoing commitment to supporting diverse investments across the U.S. through other channels.
Techstars co-founder and CEO David Cohen informed staff of the layoffs, attributing them to overexpansion and overhiring. The majority of the cuts will affect engineering, support services, and sales and partnerships teams. However, staff managing other accelerator programs will largely remain unaffected, with the exception of those involved in the AdvancingCities initiative.
This announcement comes amid a period of transition for Techstars, which saw its CEO Maëlle Gavet depart in May, leading to Cohen’s return to the role. The company also reduced its headcount by 7% in January.
Under Gavet, Techstars had focused on expanding its program offerings, but this strategy faced criticism from the investment community. In his email, Cohen signaled a shift in focus from scaling to improving support for founders.
