Has anyone at an unprofitable company ever been told that they "were NOT on a trajectory to profitability"??? I feel like that the statement that you are on a path to breakeven, means absolutely nothing. And that you should ALWAYS consider yourself to be in a high risk situation if your company is losing money.
I don't know how common it is to specifically deny it, but plenty of early stage startups consider themselves to be in a "growth stage" where it doesn't make sense to talk about the path to profitability.
The CEO answers to the board, and the board is usually of the type to at least ask the question "Everyone is jumping off a bridge, why aren't we?" And sadly the easiest answer is "we ARE jumping off the bridge, see?"
Interesting that everyone is so certain that we're jumping off a bridge now with layoffs, instead of that we jumped off a bridge before with the hiring spree based on Covid-stimulus.
I don't think that a covid-related hiring spree should have affected a company like Confluent. Yeah there were probably many product companies that got more money due to Covid that wanted a managed Kafka solution, but Covid also took down other kind of companies who might have been Confluent's customers.
I think it has more to do with cheap money not being cheap anymore.
Not surprising. Every company is going to take the opportunity to trim costs when it doesn't affect their PR as much as it would any other time.
Every company that mishired.
You don't cut costs if they aren't costs.
If you hired employees to do something and they're making you money hand over fist, you don't fire them. They're not an expense. They're a profit center.
Interesting that everyone is so certain that we're jumping off a bridge now with layoffs, instead of that we jumped off a bridge before with the hiring spree based on Covid-stimulus.
I don't think that a covid-related hiring spree should have affected a company like Confluent. Yeah there were probably many product companies that got more money due to Covid that wanted a managed Kafka solution, but Covid also took down other kind of companies who might have been Confluent's customers. I think it has more to do with cheap money not being cheap anymore.
I really get the feeling that many companies are just blindly doing whatever other companies do. One starts large layoffs, and suddenly everybody is doing it. At other times, when one goes on a hiring spree, they all go. One tries to reduce salaries, they all do. One pays enormous bonuses, and they all do. It's like CEOs aren't really thinking for themselves, just copying whatever the market does.
>I really get the feeling that many companies are just blindly doing whatever other companies do.
Alternatively, we are in a unique window where cutting underperforming projects whole-cloth can be done with almost no signaling risk (had this happened in 2021, people would assume the worst), so CEO's are cutting everything they don't like now, assuming they won't be able to do it as easily later.
I really get the feeling that many companies are just blindly doing whatever other companies do. One starts large layoffs, and suddenly everybody is doing it. At other times, when one goes on a hiring spree, they all go. One tries to reduce salaries, they all do. One pays enormous bonuses, and they all do. It's like CEOs aren't really thinking for themselves, just copying whatever the market does.
You likely have to go on a hiring spree and pay large bonuses to stay competitive when others are doing the same. Without the benefit of hindsight it was not obvious that the free money era would end so abruptly. Even the Fed did not expect to raise rates until 2023. It has been about the length of one finance professional's career since the Fed was last forced to hike into a growth slowdown, so few have experienced this environment.
Apple stands out as the contrarian that didn't panic hire. They will probably come out ahead at the end of all this as their reward.
Interesting that everyone is so certain that we're jumping off a bridge now with layoffs, instead of that we jumped off a bridge before with the hiring spree based on Covid-stimulus.
I don't think that a covid-related hiring spree should have affected a company like Confluent. Yeah there were probably many product companies that got more money due to Covid that wanted a managed Kafka solution, but Covid also took down other kind of companies who might have been Confluent's customers. I think it has more to do with cheap money not being cheap anymore.
Money was never cheaper in the history of the US than during Covid... with 10% inflation and 0% interest rates, and a 10% deficit spending on stimulus.
Oh my sweet summer child.... As someone who lived through the .COM crash and implosion and then 2008, any company with "strong cash reserves" and "trajectory to profitability" is not making more money than they are spending. They are, to use the SV term - losing runway. This is catastrophic because it's infeasible to raise money right now to extend the runway. If the plane is not airborne (making significantly more m…
So I work for a company with "strong cash reserves" and "trajectory to profitability", and I was a child in 2008. We haven't done any layoffs yet, but it's definitely possible. Any advice for someone in my position with no recession experience?
Maintain a broadly diversified portfolio. If you have money to invest, try to avoid tech, since it's highly correlated with your employment situation. Keep costs low and savings high.
Also most importantly don't read the news. I had just started working in 2008 and honestly didn't really pay attention to the recession and luckily it never affected me materially or mentally.
"The reality" is jobs = people. We don't live in a vacuum. It's seriously not that hard either. Between the hundreds of thousands of regular people losing their livelihoods and some investors losing money ("don't invest what you can't afford to lose" something something), doesn't sound too complicated for me. Humanity is not opaque unless you make it so, like this particular system does. It's just people.
if you don't have money to pay employees then they're out of a job, and if you don't grow you don't get investors and don't hire people please explain how "humanity" solves this
It’s called “Japan”. Low performers are kept in corporations to do nothing all day while many of their peers work themselves to death.
"The reality" is jobs = people. We don't live in a vacuum. It's seriously not that hard either. Between the hundreds of thousands of regular people losing their livelihoods and some investors losing money ("don't invest what you can't afford to lose" something something), doesn't sound too complicated for me. Humanity is not opaque unless you make it so, like this particular system does. It's just people.
if you don't have money to pay employees then they're out of a job, and if you don't grow you don't get investors and don't hire people please explain how "humanity" solves this
Humanity solves this by having an entrepreneur that just wants to have a business up & running in a sustainable, bootstrapped way, that will give jobs to X people earning Y in salary, while the founder in the long run will earn 5-7Y salary. Instead of having founders that want to be billionaires with VC money in a 5 years time-frame. There is still risk, and a business might fail and jobs be lost, but the scale is different.