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MagicalQuokka
MagicalQuokka
Stealth

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.

17mo ago
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GoofyPickle
GoofyPickle
Stealth17mo

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

WigglyBanana
WigglyBanana
Stealth17mo

100%

PerkyMarshmallow
PerkyMarshmallow
Razorpay17mo

All of this except some places where there is a non-founder CEO and the founder starts taking extra attention in the business

BubblyDonut
BubblyDonut
Dream 1117mo

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
PerkyMarshmallow
PerkyMarshmallow
Razorpay17mo

Wow sounds a lot like mine too, got real fried when I had to give up Notion and Slack.

MagicalQuokka
MagicalQuokka
Stealth17mo

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?

GoofyPickle
GoofyPickle
Stealth17mo

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 !

MagicalQuokka
MagicalQuokka
Stealth17mo

Wow, that's a new one. Any places you can name where this has happened?

JumpyQuokka
JumpyQuokka
Stealth17mo

CFO/Founder's calendar has a leadership meeting titled "Options to restructure the business" 🤡

PeppyMuffin
PeppyMuffin
Stealth17mo

What to do when whole cofounder/HR team calender is private? 😕

JumpyQuokka
JumpyQuokka
Stealth17mo

Then what others have mentioned in comment's

WigglyBanana
WigglyBanana
Stealth17mo

@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

MagicalQuokka
MagicalQuokka
Stealth17mo

How is high attrition a sign? Is it because other people are suspecting an incoming train wreck?

PeppyHamster
PeppyHamster
Stealth17mo

They have the info that you do not and belong to important departments. It’s a big red flag.

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