Startup founders logic behind layoffs

Corporate Strategist

Startup founders logic behind layoffs- Grapevine

Welcome to News Discussion's Private Community

Udaan fired more than 150 employees after raising $340 million dollar

Link: https://inc42.com/buzz/unacademy-fires-another-250-employees-to-turn-profitable/

Unacademy fires 250 employees to 'turn profitable'

Pathetic. How many times these so called another layoff?  
 This is pure scam. Such kind of CEOs and CTOs have no right to be at such higher places. These id*ots come to media and give lectures also. There should be some laws in place for layoffs. These People wake up and do layoff. Some get funding and then do layoff and some vice versa. Some fire and then again post about hiring next month shamelessly. It's like a fashion for the. Layoff is no more a last resort these days.  
 These kind of companies will surely go down the drain.  
 CEOs and higher management should be made to disclose their salary and perks so that junior employees should also know how much salary difference is there and is there really a need for cost cutting.  
 Of not, we should atleast stop respecting/ideologise such people. If possible stop using/promoting their products as well. Treat them the way they treat employees.

Software Developer

Operations Manager

I have been through ups and downs in IT, but these layoffs seem crazy. There is just no pattern to it, more like everyone is firing let me fire.

Honestly I feel its high time Tech companies, Startups take a hard look at their business and revenue model. Most just seem to be in a herd mentality.  Every one is mass hiring, let me also mass hire. Every one is giving exorbitant salaries, let me also give.

Its become more a cycle now, hire in large numbers, find there is no work to give, no revenue to sustain, and so mass fire again. This just cant be going on. 

Who makes mistakes that results in revenue loss or crunch? 

Top management 

Who gets fired ? 

Every one except the ones who are responsible.

Dont fucking give me the reasoning that you are doing this for efficiency and streamlining.

No you are just doing it to protect your own arse, while making scapegoats of others.

So the Musks, Pichais, Zuckerbergs happily take fat bonuses, while drafting teary regret letters for firing. And they are supposed to be our role models to look up to? 

Enough is enough IT industry can't forever be running in this same mode. These hire and fire cycles are getting weary nowadays.

Rant on the layoffs

Software Engineer

I don't know why everyone is making a big deal out of layoffs. Even the ones who laid off are not that concerned than the ones who comment.

Laid off employees literally get free money upwards of 10 lakhs in many cases of senior developers who are laid off from top tech startups. Companies pay severance equal to 3-6 months salary of laid off employees. Some even offer other benefits as well.

I personally know a couple of Devs who got around ~9-10L in severance pay. So, yeah if there are layoffs happening in funded tech startups or leading tech companies, considering their pay range, laid off employees get handsome severance pay including employee benefits

Layoffs a big deal? Positive side of layoffs

Hope you get laid-off & get a good severance package! Will see how your job search goes.

Engineering Manager

Product Designer

Welcome to Indian Startups's Private Community

Tell your story and how you felt after seeing that mail or listening about the news.

Indian startups should chase profitability instead of playing bigger fool game theory.

40k+ laid off in startups.

Senior Consultant

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.

Layoffs at startups: Early signs or warning signals

Hiring freeze, decreased marketing spend, founding team retreating away from day to day activities and meetings

Product Manager

Pathetic

Summary of layoffs at startups

Product Marketing Manager

Being an investor in equity markets, i was aware of the fact that US market will crash as the free money by fed draws back. I obviously was not able to link this up with the funding dry-ness.

I still expect a founder to be aware of these economic events. I am curious how could the management decide to go for hiring employees only to lay them off a year later. 

If you are a founder, would be happy to know the other side of the story.

What triggered layoffs ?

Let me explain in detail. 
 There are two parts to it and can be broken down basis PnL 
 1. Revenues : Sudden jump in tech( social media, e-commerce, ad tech, fintech, etc) plus supporting industries (chipmakers, laptop / device manufacturer) and the general economy with QE money  
 This impacted forecasts as most firms forecast AOPs basis historically trend (which clearly was an abberation) - this lead to higher HC estimates and rampant and quick hiring  
 Variable costs: CAC, customer support, sales incentive all spiked up as 1. Everyone was putting money (inc bidding price for key words) and 2. Huge customer inflow due to covid (edtech, e-commerce) that required support  
 Fixed costs: While office space / rents remained steady or dropped as % of revenue. This was offseted by fixed tech (software, hardware, people) costs and other costs like (legal, HR, Business, Marketing, supply chain, etc.) the talent was expensive to source plus their need was instant as you already had customer to be served  
 All of this lead to rampant hiring, inflated CTC, rosy forecasts, etc.  
 everyone had turned a blind eye to inflation implications (as for the past 30 Y no one saw a shooting inflation - hence the key decisions makers had now experience & idea about it) - till Dec’21 even FED said inflation is transatory. 
 It was the Ukraine invasion that opened people eyes. Oil went up, food prices went up, UK Europe saw an energy crisis etc 
 This made all the rosy forecast mentioned above duller as 1. Demand was expected to reduce due to higher cost of living 2. Capital became scarce as funding drired 3. Cost of capital (WACC) became expensive as hurdle rate climbed (which is rate of return for bond)  
 Management and investor panicked as they have limited partners (LP) to answer and quess who are these (big pension funds) so people’s pension money had come into startups which were not showing signs of exit for investors. 
 All in all - it is a pain we all have to bare for being exuberant in 2021-2022:

Growth Manager

Painful to see so many startups run out of money/ shut down. Is your company doing good?

Founders are not shitposting on the socials, so that’s good I think 😅

Employees who are top performers are laid off. 
Employees who are in a firm for a long time are laid off. 
Employees who are freshers are laid off. 
Employees from IIMs/IITs are laid off. 
Employees who work just to get the job done are laid off. 
Seniors are laid off. 
Juniors are laid off
Hard working employees who get good ratings and give extra hours are laid off. 
Bad peforming ones are obviously laid off. 

Is there anyone who is safe. It's just at the mercy of few decision makers at the top and no matter what you do you will never be safe. 

Now I understand why parents say that government job is better.

Is there a pattern in layoffs

Business Analyst

I was working at a Start-up more than a year back. We were required to either raise funds or do something else, against what we wanted to do, to move forward. 

One day, the co founders got us on a call (<10 people team), and explained the situation to us. 

Either an acquisition or a round of funding was the only chance. We hadn't raised any round up until then. 

Unfortunately, we had to bid goodbye to something that we were passionately working on.

Lay-offs!

But, we got 2 months notice. And on top of that, we were encouraged to prepare for interviews throughout those 2 months (while giving minimal importance to work). 

I literally cried multiple times because of the thought of having to leave the amazing team. 

The founders helped us with all the support, and made use of their network to help us get through as well. We're still in touch with the team, and all of us are at relatively good positions now. 

(Although anonymous, just wanted to share this out there with all of you folks. And I try to 'help it forward' as much as possible)

Good layoffs!

Unacademy layoffs have started

50% layoff at a Bangalore  based health tech startup. Founder had no shame or guilt. Has raised funding recently but chose to fire people again. This is the third layoff in the last 1.5 years. Terrible management, declined variable pay. Severance is to paid in the next 4 months. Just trying to pivot the company into ‘AI’ without any plan whatsoever.

Massive Layoffs at HealthTech Startup

HealthifyMe is the Startup. They are having other PR articles to cover this shit now

Just an open ended question on why are layoffs happening on such a scale. I personally feel the skill to salary ratio has fucked up so much lately that the companies are having to fire people who are essentially useless to them. More of liabilities than just assets! What do you think?

Layoffs - who do you blame?

Absolutely agreed. Hiring in hordes because money was easily available earlier and founders/companies thought that they will be able to build more and hence get more value / valuation sooner was the core reason why the skill to salary ratio got f’ed up. And it’s good that it’s being reset now. 
  
 Coming to who to blame for layoffs - no one. It’s pure capitalism - there was money, hence there were jobs. For whatever time people got paid a lot more than they deserved - they should be rather thankful. If they built their life around the assumption that this much money was the new normal, it was their naïveté. Companies got to survive, and they have to do whatever has to be done… as long as it’s ethical. Firing is fine. Not paying salaries / dues is not.

Founding Engineer

Software Lead

Fynd downsizing

RPA Developer

Be it about investors, co-founders, hires, freelancers, family, or yourself

Founders, what will you never share publicly about your startup?

Hi , this post is intended to be a disclaimer to anyone who is planning to join Yubi. A lot of things are happening here that show some signs of an impending layoff

1) Several senior folks in tech and product have quit. Also there is no replacement hiring planned for them. Several projects are also getting shelved as a result.

2) there were several open roles a few weeks back and almost all of them are on hold as of now across all depts( tech , business , ops)

3) rampant cost cutting. The lunch options have been reduced to just 1 dal , 1 veg , rice and chapati.  Snacks have been removed too.


Because of several folks quitting in less than 6 months and no replacement hiring , load has increased tremendously on existing members who are themselves trying to leave. 

People have serious doubts on whether any hike or bonus will be given or not this year.

Rampant negativity at Yubi

I am seeing lots of startups are firing these days even previous year it was happening.

Would like to know the mindset of employees who got saved. Like to know what goes inside your head. How do you deal with this situation as it can happen with who got saved somehow, etc etc

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