Winter Is Coming: How to Survive a Downturn
Things are getting chillier on Wall Street and in Silicon Valley. With the Nasdaq in a bear market and growth slowing, an increasing number of tech companies including Facebook, Netflix, and Salesforce are pulling back on hiring. Cycles are nothing new. Below, advice on how to survive a downturn.
Cycles Happen
Hiring is now a privilege in tech. Citing shifting investor sentiment, on May 9th Uber CEO Dara Khosrowshahi sent an all-company email saying that Uber needs to slow hiring, reign in marketing, and start generating free cash flow. Uber isn’t alone. In April, Robinhood laid off 9% of its workforce. Netflix is cutting too. So is Carvana. Facebook, Salesforce, and Wayfair are slowing hiring and it’s rumored that Amazon’s retail division will follow suit. Google searches for Layoffs.fyi, a site aggregating startup layoffs, are skyrocketing.
First quarter earnings reflected slowing growth and heightened uncertainty (war, inflation, interest rates). Recent stock market volatility is churning investor’s stomachs. After a decade-long bull run, things are slowing down in tech.
The transmission mechanism of slower growth moves from public markets to private markets. Late stage privates are already digesting this new environment. In March, grocery delivery firm Instacart slashed its…
