“High-flying startups with record valuations, huge hiring goals and ambitious expansion plans are now announcing hiring slowdowns, freezes and in some cases widespread layoffs. It’s the dot-com bust all over again — this time, without the cute sock puppet and in the midst of a global pandemic we just can’t seem to shake,” reports protocol.
According to protocol: “Founders and investors are preparing for what looks like an economic downturn — and perhaps even a recession. Last week, Y Combinator sent an email to its portfolio founders warning them to “plan for the worst.” The startup accelerator cautioned that the downturn would likely most affect “international companies, asset heavy companies, low margin companies, hardtech, and other companies with high burn and long time to revenue.”
“It’s not just early-stage startups that are feeling the burn. Big tech companies including Meta, Salesforce and Netflix have also recently announced hiring freezes or layoffs in the midst of cost-cutting pressure and rising inflation, coupled with a looming bear market and rising interest rates. Industry stalwarts (Microsoft), upstart social media companies (Snap) and crypto newbies (Coinbase) haven’t announced layoffs, but they’ve all slowed hiring after poor quarterly results. The S&P 500, dominated by tech stocks, has lost over 20% of its value so far this year.”