Are recent tech layoffs revenue related or top down instructions from VC? Since Twitter's layoff by the new boss, it seems that more tech companies are following suit, citing various reasons, especially like economy downturn. How true is that? It feels that investors are the one dictating the layoff, seeing that Twitter operates 'just fine', that growth at all cost strategy can be culled, and that this is the best time and opportunity to announce layoff witbout much backlash. |
VC is becoming harder to get, especially at the same valuation as before. What you never want as a founder, that the valuation drops. Therefore, these companies try to make the current batch of money last longer. Secondly, most don't have the revenue to support even a quarter of their headcount. In the end, it's all about increasing the financial runway.
Twitter still works fine, technically, but a lot of the fired people were content moderators and so on. They don't contribute to running twitter's tech but they are important to not have it become an even worse shithole than it already was.
This is the Jack Welch method