Startup Layoffs and Developers

Why do startups ask people to leave?.

1) Reduce ( cash ) burn rate and increase their lifespan. 90%+ of all VC funded startups aren’t making profits,

2) To right size team when they feel that in near distant future economic outlook will not be good,

3) Poor execution and no Product Market Fit or Growth, thus raising the next round is virtually impossible. Desire to hit breakeven to survive.

Who do startups ask to leave?.

Let me answer inversely. Who is most likely not to be asked to leave?

1) Developers who can keep entire software up and running and have made the most contributions. Key contributors,

2) Developers who are known to be positive, disciplined or self driven and helpful to peers,

3) Good personal relationship across teams and with peers,

4) You have spent a long time at the company and are known to be loyal to the company, someone who will stick around in the tough times ahead.

Everyone else is at risk of being asked to leave.

Salaries also play a key role as it’s all about budgeting. Divisions that are cost centers or support roles are the first to be marked to be let go or be reduced in headcount.

Developers in Indian VC funded startups need to understand

• VCs are funding large amount of growth we are seeing today not cash flow
• Domestic M&A in Tech sector is negligible
• Startup burst cycle follows funding cycle after few years

Career should be 30 to 40 years, to ensure longevity

• Invest in the right skills. Assess the market value, growth potential of the skill.
• Seek new roles and responsibilities if it intrinsically motivates you, reinvent yourself. Be someone who can wear multiple hats.
• Build relationships.

Easier to do the above by seeking them out as opposed to having circumstances force you to.