Layoffs at startups: Early signs or warning signals

Hiring freeze, decreased marketing spend, founding team retreating away from day to day activities and meetings

Having worked in a startup that may cease to exist in the next few months:

• High attrition rate + company doesn’t replace employees that are leaving (High Attrition + Hiring Freeze)
• Overconfidence and arrogance about selling capabilities (while there are almost no new sales)
• Management pressure to put employees on PIP
• Multiple team restructuring tactics
• Reduced HR activities & morale (yes, the HR at this previous company said there is no budget for any HC/HR initiatives and activities)
• Reduction on subscription costs for daily use softwares (this company let go of their JIRA subscription)
• CEO started avoiding/reducing/delaying town hall calls
• CEO was busy starting another startup while all this was taking place to try and “pivot” to a new product market fit
• Almost no marketing spend

Interestingly another trend - the whole company is now up in each others faces. Folks in strategy, product and marketing now doing sales actively pitching customers etc - run !

CFO/Founder's calendar has a leadership meeting titled "Options to restructure the business" 🤡

@Firstradar8 nailed it

If you also see all hands/town halls reducing
Fewer interactions between founders and team

Also if there has been higher than normal attrition lately

I’d say the macroeconomic environment and the perception of where it is headed is a big indicator. At the company level, secondary signals can be recent revenue targets missed, which can be identified in all hands.

Cost cutting when it comes to perks , projects being shelved. Back in March I had created a post here " rampant negativity at Yubi" highlighting several issues that showed a signs of a possible layoff. 4 weeks after layoffs actually started. You can refer to that for more info

Over funding. Over hiring. Over confidence.

Then PIPs start coming out.

Leadership treat you like a labour. They will change the eye interaction how they were doing earlier. They will only connect with you only for task while earlier they were are also involved with you in fun task like party, board games etc

When a lot of people don't have enough projects..it's clear they overhired during the boom and they'll be cut soon