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> In making these changes, you might reasonably wonder whether Stripe’s leadership made some errors of judgment. We’d go further than that. In our view, we made two very consequential mistakes, and we want to highlight them here since they’re important: > - We were much too optimistic about the internet economy’s near-term growth in 2022 and 2023 and underestimated both the likelihood and impact of a broader slowdown…
And, of course, the leadership aren't suffering their mistakes.
2) Saving this in case I ever need to tell a portfolio company how to do a layoff.
Earlier quoted context omitted.
They are doing what any company does whether the slow down in the economy impacts them or not. They lie and say it impacts them and use it to do a purge. I worked at companies that were in no way impacted by the 2008 financial crisis (in fact, business was booming). Leadership managed to use it as an excuse to do a hiring freeze and plead with existing employees that they are the lucky ones and they need to work hard…
>> because we have record unemployment I inferred that you meant record ^low^ unemployment?
> In making these changes, you might reasonably wonder whether Stripe’s leadership made some errors of judgment. We’d go further than that. In our view, we made two very consequential mistakes, and we want to highlight them here since they’re important: > - We were much too optimistic about the internet economy’s near-term growth in 2022 and 2023 and underestimated both the likelihood and impact of a broader slowdown…
The reality is there's very little evidence for an actual "broader slowdown". GDP growth in the US was decent in the last quarter despite a huge decline in home sales and headwinds from inflation, and unemployment remains at record lows. There's certainly some signs for concern, but the only real, persistent decline has been in the stock market (which, honestly, is why this whole period is kinda weird).
The truth, when I look at these stories, is many of these tech companies expected the major changes during COVID, which lead to huge boosts in revenue for a lot of tech companies, to persist post-COVID, and that simply didn't pan out. The result is a lot of businesses with bloated workforces predicated on long-term financial projections that haven't panned out.
But, Stripe can't admit they made a major strategic blunder--the exact same blunder made by companies like Peloton--so they have to blame it on "a broader slowdown" since then they have an exogenous factor they can point to rather than admitting they were just caught up in the techno-optimism of a transformed post-COVID society.
Hey pc, if you're around: > John and I are fully responsible for the decisions leading up to it. What are the two of you doing to show accountability? Are you slashing your own future stock grants, cutting your own salaries, diluting your positions with stock grants to everyone else? What's the consequence for this decision on your end that shows you're accountable for what happened, not just responsible for it? Sinc…
14% seems like a very high number to me to axe at once, how have you got 1 in 7 employees that your business doesn't need to function when it is growing.
Grew tx volume 3x since the pandemic, but using the macro environment as an excuse to shave the bottom 14%. Just come out and say it.