<story><title>Meta has started its latest round of layoffs, focusing on business groups</title><url>https://www.cnbc.com/2023/05/24/meta-layoffs-latest-round-of-cuts-focuses-on-business-groups.html</url></story><parent_chain><item><author>bratao</author><text>I&amp;#x27;ve got a burning question on my mind and I&amp;#x27;d really appreciate some insights.&lt;p&gt;From what I can tell, the recent wave of startup layoffs seems largely driven by companies bracing for a potential economic downturn and using their own customer data to anticipate seriously bleak scenarios. But if that&amp;#x27;s the case, are we basically still in the early innings of this crisis? Logically, the domino effect would mean that step two involves companies closing up shop and going belly up, right?</text></item></parent_chain><comment><author>specialp</author><text>Startup layoffs are very much related to the funding environment. I work for a startup that laid off half our staff. There have been very few series C and later this year. So if you are a startup you need to decrease burn now and get to having good MRR. You can&amp;#x27;t aggressively grow at a loss and expect to get more funding for that with few exceptions. When VC money was much more plentiful people hired a lot without the pressure to become more sustainable. For further funding rounds they had to show that they were growing in some way. SVB collapse was huge in the startup world not just due to the people who had deposits there.&lt;p&gt;With larger companies like Meta, their multiples are also based on growth. So even though large tech shows no signs of being financially insolvent, they will have to still deliver growth in profit with flat to declining revenue. So the focus then is to decrease expenditures in lieu of revenue. There was a ton of hiring the last few year along with the tail wind of tons of money out there. Now it needs to rebalance.</text></comment>
<story><title>Meta has started its latest round of layoffs, focusing on business groups</title><url>https://www.cnbc.com/2023/05/24/meta-layoffs-latest-round-of-cuts-focuses-on-business-groups.html</url></story><parent_chain><item><author>bratao</author><text>I&amp;#x27;ve got a burning question on my mind and I&amp;#x27;d really appreciate some insights.&lt;p&gt;From what I can tell, the recent wave of startup layoffs seems largely driven by companies bracing for a potential economic downturn and using their own customer data to anticipate seriously bleak scenarios. But if that&amp;#x27;s the case, are we basically still in the early innings of this crisis? Logically, the domino effect would mean that step two involves companies closing up shop and going belly up, right?</text></item></parent_chain><comment><author>maxlamb</author><text>That’s just an excuse the CEO’s are using to avoid blame. They over-hired during 2020 and 2021 “because everyone was doing it” and now they realize they have 10’s of thousands of employees with nothing to do and huge salaries so it makes no sense to keep them.</text></comment>