Layoffs at startups: Early signs or warning signals
In your experience, what are some early signs that help detect incoming layoffs at a startup? It could be company-wide, team specific or in a particular function only.
Steglomaniac
Stealth
a year ago
Hiring freeze, decreased marketing spend, founding team retreating away from day to day activities and meetings
Barbaadeshwar
Stealth
a year ago
All of this except some places where there is a non-founder CEO and the founder starts taking extra attention in the business
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ProteinPancakes
Stealth
a year ago
Having worked in a startup that may cease to exist in the next few months:
- High attrition rate + company doesn’t replace employees that are leaving (High Attrition + Hiring Freeze)
- Overconfidence and arrogance about selling capabilities (while there are almost no new sales)
- Management pressure to put employees on PIP
- Multiple team restructuring tactics
- Reduced HR activities & morale (yes, the HR at this previous company said there is no budget for any HC/HR initiatives and activities)
- Reduction on subscription costs for daily use softwares (this company let go of their JIRA subscription)
- CEO started avoiding/reducing/delaying town hall calls
- CEO was busy starting another startup while all this was taking place to try and “pivot” to a new product market fit
- Almost no marketing spend
Barbaadeshwar
Stealth
a year ago
Wow sounds a lot like mine too, got real fried when I had to give up Notion and Slack.
Wow, that sounds like a lot of clearly bad signals.
What else did you see in your time there? Anything that could've helped spot the train wreck earlier?
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Steglomaniac
Stealth
a year ago
Interestingly another trend - the whole company is now up in each others faces. Folks in strategy, product and marketing now doing sales actively pitching customers etc - run !
CFO/Founder's calendar has a leadership meeting titled "Options to restructure the business" 🤡
Punter17
Stealth
a year ago
What to do when whole cofounder/HR team calender is private? 😕
@Firstradar8 nailed it
If you also see all hands/town halls reducing
Fewer interactions between founders and team
Also if there has been higher than normal attrition lately
How is high attrition a sign? Is it because other people are suspecting an incoming train wreck?
sunnysideup
Stealth
a year ago
They have the info that you do not and belong to important departments. It’s a big red flag.
Cloonmeister
Stealth
a year ago
I’d say the macroeconomic environment and the perception of where it is headed is a big indicator. At the company level, secondary signals can be recent revenue targets missed, which can be identified in all hands.
That's a great point. How many revenue targets missed (and by how much) would be cause for concern?
Cloonmeister
Stealth
a year ago
I think that would depend on the individual company. I’d think it depends on by how much they missed it as well as their cash position.
Itachi777
Stealth
a year ago
Cost cutting when it comes to perks , projects being shelved. Back in March I had created a post here " rampant negativity at Yubi" highlighting several issues that showed a signs of a possible layoff. 4 weeks after layoffs actually started. You can refer to that for more info
Itachi777
Stealth
a year ago
Fintech Yubi
Flysky
Stealth
a year ago
Over funding. Over hiring. Over confidence.
Then PIPs start coming out.
Leadership treat you like a labour. They will change the eye interaction how they were doing earlier. They will only connect with you only for task while earlier they were are also involved with you in fun task like party, board games etc
When a lot of people don't have enough projects..it's clear they overhired during the boom and they'll be cut soon
FancyChino64
Stealth
a year ago
less spending on marketing, festival activities, team lunches, team off-sites....
wokiedokie
Stealth
a year ago
1. Frequent all hands/townhall meetings, excessive talk on efficiency and cost cutting from the leadership
2. Macro economic cues
3. Projects not leading into revenue after many months
4. Discussion about restructuring/realigning teams
5. During planning cycles, likely before appraisal times?
Demon
Stealth
a year ago
The earliest sign is people suddenly becoming less serious about deliverables. Another is company stopping highlighting growth numbers like users and ARR.
The next step is hiring freeze and/or senior folks avoiding meetings and JIRA updates.
Also company getting too defensive in all hands (because they are trying to stop senior people who know what the truth is) to avoid fleeing.
Working in byjus was like a real life Tinder, everyone on the floor was screwing someone or the other, sometimes even multiple people
InternKhabar
Student
a year ago
When a new c-suite joins and is meeting everyone for chai. Sorry gossip over chai. Budgets being cut down on marketing, sales team being halved. You know it’s around the corner
sudden reduction in notice period time or changes in notice period policy...
10 to 20% of higher leadership leave in aproox a single month of time.
Company declares profit in annual meeting, but employees do not get pay hikes... Red flag !
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