Smurfminion

Funding and layoffs

Why do some startups lay off people even when they know that they'll be raising money soon via new funding?

Case in point: Dunzo

Are these employees given severance? Or is it just that Hi, Hello, Today is your last day, thank you, bye that you see most startups do?

What are your thoughts on this?

19mo ago

Referme

Amazon19mo

Layoffs just to increase their runway since they have no sight of profitability in the near future

Smurfminion

Stealth19mo

Even when new funding's on the horizon?

Referme

Amazon19mo

Who told new funding is on the horizon? Even the 75m funding dunzo took is debt not free VC money

SuddenBust35

American Express19mo

Thinking out loud: Cost cutting (in terms of workforce) might be a prerequisite of the funding deal

BiryaniEnthu

Stealth19mo

This is actually true. Before my company (not naming) raised next round in March, they had to lay off complete senior management. These people were bought in from high paying startups and given lucrative salaries. Wiped off, and not replaced

Baby_yoda

Stealth19mo

That became a pre req for lot of rounds since last year

WryExile38

Swiggy19mo

Beheti ganga mai haath dhoona

JoblessAss

Jobless19mo

At current scenario, No one knows how long this market recession going to continue. So all the companies tries to reduce the count to increase the run way. Because at the end of recession which ever company sustains and passes it, will grow big. It’s just a matter of time for them.

And When cost cutting comes into discussion, their first point will be layoff. They won’t think in reducing any other spend than the salary part. That’s how their mind are trained.

GeekAzoid

Stealth19mo

I'm also working in a well established startup and got layoff. They said that apply for resignation from portal and you have to serve 2 months of notice period and you'll get salary and don't have to work in office, just finish the ongoing tickets. And start searching new jobs.