An Update On Pursuit Actions And Response To Covid-19

May 8, 2020

Dear team,

In this increasing challenging and uncertain time, I am writing to share with you an extremely difficult update. We announced that we will be furloughing 43% of our team. In addition, the leadership will be taking 25% pay cuts, I am taking a 40% cumulative pay cut, and the remaining staff will be taking a 10% pay cut with the exception of the Fellow-facing staff and engineers.

This decision is painful. For an organization like ours that is so focused on building community, this is particularly difficult, and it will be even harder for those who are being furloughed. For the past two months I, along with Pursuit’s leadership team, have actively exhausted every option to minimize the impact of Covid-19 on staff and Fellows. Impacting our team and making these types of changes has been our very last option. In this email, I will share as many details as I can about why we decided to take this action, how I arrived at this decision, and what is next for Pursuit.

Furlough Impact on Staff

First, I want to let you know that this is not the fault of anyone that has been furloughed. This is not your fault and you did nothing wrong. We have a fantastic team and I am incredibly proud of the job you have done for our Fellows and for Pursuit. I am truly sorry that you are impacted.

Our furloughed staff remain a part of our team. We hope to bring staff back from furlough if the external environment or our fundraising picture changes. We are aggressively pursuing new funding opportunities and new strategic directions amid Covid-19 so that we can try to make this happen. However, unfortunately, there are no guarantees and we are taking these actions now because the future is uncertain.

Our furloughed staff members will maintain Pursuit healthcare and benefits, and will have the ability to access unemployment benefits. If they decide to seek other employment at any time during this furlough period, we will do everything we can to help them get jobs and we will also prioritize our Fellow/Instructional Associates for all future Pursuit facilitated hiring opportunities.

Pursuit Response to Covid-19

From the start, it was clear that Covid-19 would fundamentally reshape not just our organization but the world at large. Covid-19 is exposing the deep inequities that exist across our entire society. The virus has devastated the blue-collar, low-income communities of color that we serve, especially here in our hometown of Queens.

Furthermore, Covid-19 has changed the employment market and disrupted many industries and businesses, including the tech industry. As an organization that trains software engineers, we have had to assess how this pandemic would affect the job outlook for our Fellows.

As we ventured into this new world, it was important to define our organizational priorities in response to Covid-19 to help guide and ground us:

Our current 6.0 Fellows continue to have a high quality experience in a remote environment

All of our Fellows and alumni are supported as best as we can with a Pursuit Emergency Relief Fund to mitigate the financial impact of Covid-19

Pursuit is on a sound financial and strategic footing for the future

These priorities remain as true today as they were at the start of this crisis. We have tried our best to approach this time of uncertainty with continual communications, detailed planning, empathy, and transparency. We held a series of four special All-Staff meetings with the team and town halls discussions with each class and alumni at major milestones so that we could be in-sync and move forward together.

With these priorities laid out from the beginning, we took immediate action. The whole team worked to quickly transition to remote learning for all of our classes. We quickly established a $250,000 Emergency Relief Fund, carved out from our own operating budget, to tackle our priority of mitigating impact on our community. Through the Emergency Relief Fund, we dispersed cash to our Fellows in need, covered a month of Pursuit Bond payments, and provided additional supports such as wifi hotspots for those that needed it to continue learning. I remain extremely proud at the speed and care in which you all worked to make that happen. I believe that this immediate response made an impact on those in need and also reflected the very best of our values.

At the same time, the leadership team immediately began scenario planning. Taking into account a wide range of public health and macro-economic indicators that impact Pursuit, we examined our fundraising and financial forecasts in detail. We communicated our priorities with every Pursuit partner and I am grateful for their generous support and understanding in this difficult time.

Non-profits are going to be particularly hard hit and, sadly, we anticipate that the sector will be devastated by this crisis. In our All-staffs over the last two months, we’ve read together as a team the writings and learnings of industry leaders across the non-profit and technology sectors such as Seachange Capital, Sequoia Capital, and Marc Andreessen, among others. We’ve discussed what past downturns have looked like and their implications. We’ve discussed how we would approach any shift in strategy and if, in the worst case, what would happen if we made expense reductions that impacted the organization. We’ve heavily relied on our Board members and partners, seeking guidance and wisdom about how to navigate through these times of uncertainty from experts who had weathered previous economic downturns. As a result, we adopted risk management measures and triggering actions with guidance from our Board.

Since the start of this crisis, we have proactively taken prudent financial measures. On March 16, we instituted a hiring freeze, suspended all discretionary expenses, delayed a new office space lease, and I personally took a 20% salary cut. This collectively reduced our 2020 budget by 30%. On April 13, we took even more dramatic action by cutting, deferring, or canceling all fixed expenses to include rent, utilities, software, everything. This action reduced our non-personnel fixed cost by 90%, thus reducing our overall budget by another 15%. All of these efforts were all to mitigate impact on our team and community.

These were all necessary steps but unfortunately they are not enough.

Covid-19 presents a deeper, more profound, structural shift. While we have carefully monitored our finances, our outlook has been negatively impacted. This is a direct result of our most important customers and stakeholders also being affected. Businesses shut down and companies have stopped hiring. Philanthropy resources will decline due to the market conditions and economic uncertainty. New York City government, which has been a long-time funder of ours, is also making significant budget cuts to education, job training, and other non-profit support. We continued to look at the different scenarios that we created in March which projected coronavirus’ impact in the next 18-24 months. To give you a sense of this structural shift, our forecasted revenues this year are more than -50% down from 2019. We know these philanthropic impacts aren’t short-lived. So we must make the difficult decision now to cut expenses so that Pursuit can be on a more secure financial outlook for the future.

Pursuit is on Sound FInancial Footing

The decisions we are making now are painful. But I am confident that Pursuit is now on sound financial footing and that we will endure past the other side of the Covid-19. Throughout our organizational history, we have responsibly managed our finances with positive net assets every year. We intend to be similarly prudent moving forward amid crisis. Under our current forecasts, we will minimize the likelihood of any further changes to the team.

Further, we purposefully have maintained the ability to ramp back up if the macro-environment or our financial forecast improves. There are some promising opportunities that may positively change our outlook over the next few months. We will be working hard towards achieving this. Despite these future opportunities, the challenge for us right now is that there is too much uncertainty. We can’t give in to wishful thinking that puts the organization, and our community, at risk. It is my responsibility to be prudent and make sure that Pursuit will continue to survive, and thrive.

Covid-19 Impact on Programs

A major question for everyone has been how this will impact our current and future programs. Ensuring that our current 6.0 Fellows have the best possible experience remains our number priority. Our 6.0 Pursuit Core will continue and will complete as originally scheduled. We are working to minimize the impact on current Fellows and we remain committed to our Fellows’ success and will work tirelessly to support them in their journey.

Covid-19 has reshaped the 6.0 Fellows journey. Their journey will be different than past cohorts. Our Fellows are now learning in a remote environment. We have adapted and continue to thrive, but what the future holds for them remains uncertain. It won’t be a typical path of getting trained, applying, and then getting a job.

In my most recent Town Hall with Fellows I talked soberly about how the job market may be challenging for the foreseeable future. Many employers have hiring freezes and others are undergoing layoffs. Even in a normal market, getting that first job is a challenge. Under some scenarios, there may be an extended period of 1-2 years where getting a job will be even more challenging due to a prolonged economic downtown.

Providing Agency for the 6.0 Cohort Amid Changing Circumstances

Given this uncertainty for the 6.0 Fellows amidst Covid-19, we have decided to give all 6.0 Fellows who do not have tech jobs an opportunity to decide if they want to continue with the Fellowship program.

The world has changed. The program has changed, their life circumstances may have changed, and their job expectations for the near future have changed. Immediate income or other life factors may take precedence over learning to code and finding a job in this unstable time. For some, it may be a better decision at this moment to set a new course. And in doing so, we will release the Fellow from the Pursuit Bond obligation.

I believe in agency. Giving all of our Fellows the opportunity to make an informed decision amid these changes is critical. To be clear, we are providing this option but are not asking anyone to quit. I am not quitting and I won’t quit on them. I hope to be as transparent as I can and provide all of our Fellows the full scope of the challenges ahead.

Overcoming the challenges of Covid-19 will be extremely hard, not just for the Fellow but also for the organization. But our mission and our goals are the same. If a Fellow decides to remain a part of the Pursuit community, we commit, as we always have, to give our all. We will need to build this together and rely on each other to work through all the different challenges.

Owning Your Pursuit: It’s Time To Build

Fellows will still be encouraged to apply to jobs and Pursuit will work to prepare them, particularly for the hiring opportunities our partnerships team have secured for Pursuit Fellows. But, given the uncertainty in the job market and economic outlook, just applying to jobs does not make sense.

We will work to create new opportunities and tap into the ingenuity of our community. Typically, our Fellows at the end of the training take all the skills they have gained to create new products in a “capstone”, culminating in a demo day. This is intended to build skills, confidence, and the ability to work and thrive in a real world team. We are going to double down on these real-world projects. They will be critical to maintain skills, build resumes, and also further a sense of community.

I have shared Marc Andreessen’s 'It's Time to Build with every class. We discussed the importance of solving societal problems amid this time of crisis. This article has been a rallying call for the tech community, and I implored our Fellows to build. Through the Fellowship, our Fellows have gained the skills to contribute to our future. I am excited to see what everyone will build.

Pursuit’s Mission Is More Urgent Than Ever

I want to end with a note of thanks to the team.

For those that have been furloughed, I thank you again and again. There’s no limit to how I can fully express my appreciation.

For those who are continuing to build Pursuit, we have a lot to do and our community depends on you.

This week’s actions enables Pursuit to prepare for and better contribute to the post-Covid world. It is critical that Pursuit endures and survives this crisis so that we can continue to serve every current, past, and future member of Pursuit. We serve a community that is most adversely impacted in this time. Tens of millions of working class Americans are without jobs. Coming out of this crisis, America will have an even greater need for scalable solutions that provide skills and employment. This is the pathway to the middle class. Our mission is now more urgent than ever.

This mentality extends to how we are planning for the next cohort. This upcoming program will be starting fully remote versus transitioning into it as we did with the current cohort. This will be new and different for the organization. But I am confident that the strength of our Pursuit community will enable us to work through any challenge and build a successful program. We will take this time to get back to our scrappy roots, tap into our community, activate our amazing volunteers, engage our partners.

By working together, we can build the best possible future.

I remain firmly committed to the importance of our mission and am confident that, with you, we will survive and emerge even stronger.

Jukay Hsu

Pursuit Co-founder & CEO