GarthVader

Assistant to the Regional Manager

Something doesn’t make sense here…

I'm seeing more and more posts like this on my Linkedin feed with compelling data that the economy isn't suffering as bad as our reactions to it are. The layoffs and response from the market to what's actually happening don't align and there doesn't seem to be a causation and correlation situation going on.

So let's talk about this for a second. Why are mass layoffs with 20%+ workforce riffs still occuring when the economy is in fact still stable and growing, albeit at a more conservative rate? Is this corporate greed at play?

https://www.linkedin.com/posts/camillehansentrent_b2b-tech-hiring-activity-7031689911527231488-e50C?utm_source=share&utm_medium=member_ios Camille Trent on LinkedIn: #b2b #tech #hiring #funding | 102 comments It feels like 6-10% layoffs are now the norm in B2B tech. They’re not. Despite all the public cuts making headlines, here's what we found in our… | 102 comments on LinkedIn

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antiASKHOLE

Tycoon

15

Bravado's Resident Asshole

I think the layoffs were due to over hiring and the projections aren't being met. The economy is being blown out of proportion by media, like anything else. I mean... think about Covid. Someone stubbed their toe....covid... Someone got shot and died... covid.
Price of eggs go up...economy(when it was a flu issue) but they put the "inflation" tag on it.

ZVRK

Politicker

5

Enterprise Account Executive

Agree, the way the media, all media has turned into a clickbait machine just blows my mind. for sure things are overblown..

punishedlad

Tycoon

2

Business Development Team Lead

Gotta say that all of the chicken farms burning down was/is weird af

Sunbunny31

Politicker

2

Sr Sales Executive 🐰

Your media must be more insane than most in Florida. ;)

CuriousFox

WR Officer

1

🦊

Stay away from The Villages in FL 🛁🧽

FinanceEngineer

Politicker

4

Sr Director, sales and partnerships

It’s over hiring where most people work the “tech 20.” It’s an open secret in most technology companies that you need to over-hire to justify capital raises and valuations.

So 3 things:

1 - too many people that don’t need to be there (hiring 15 people for 6-7 FTE of work)

2 - being ready for the “next push” if a new product or shift happens.

3 - firing when no one else is will cause an exodus of talent and will hurt ability to find new people.

So, a lot of companies that aren’t doing that good need to cut and everyone else is using it for cover to get rid of the excess weight and non-performing people/departments

Sunbunny31

Politicker

2

Sr Sales Executive 🐰

Warning - purely anecdotal observation: at my last big tech employer, one strategy for the market was to completely overhire reps to make sure that no stone was left unturned. There had been some discontent at the executive level that reps were not doing more to penetrate new accounts, but would cherry pick and would leave companies uncalled, etc. So a reshuffling of teams and reallocation meant that there were more reps in smaller territories with account lists full of complete greenfield. With a 9-12 mo sales cycle, the vast majority of reps missed the number, so they were hungry, but every single company, ICP or not, was contacted. They kept this up for a number of years in most divisions. They managed to shed quite a few reps who didn't like the direction and who couldn't find a role in the largely untouched strategic sales departments, but they also got the market penetration they wanted.
And most reps are still not meeting targets - but that was not the goal. And I suspect they were not the only one with this strategy to make sure they got as much market awareness as possible.

RandyLahey

Politicker

3

Account Executive

There was a crazed hiring spree during the pandemic, especially in the tech sector. Even with the layoffs, we're still far above pre-pandemic levels.

Sunbunny31

Politicker

2

Sr Sales Executive 🐰

And my manager thinks the added pressure is that people were hired at the top of the salary range, so this is an opportunity to shed those with salaries that may have been artificially too high.

TennisandSales

Politicker

3

Head Of Sales

my 2 cents:
companies were not super concerned about being profitable.
they just needed to get certain metrics to look good to raise their next round of funding. Now that ppl actually CARE about profitability, they are taking a REAL hard look at expenses and realizing that headcount is WAY to high.

1nbatopshotfan

Politicker

2

Sales

It’s pretty clearly greed.

HVACexpert

Politicker

2

sales engineer

This explains it: https://www.wsj.com/articles/jobs-hiring-boom-layoffs-employment-11675947399

HVACexpert

Politicker

1

sales engineer

Hiring is up in multiple other industries that are offsetting tech layoffs

GarthVader

Contributor

1

Assistant to the Regional Manager

Doesn’t this just further prove my point? It’s either artificial in the tech arena or something isolated has led to this outcome at a time where other sectors are seeing reasonable and sustainable growth.

HVACexpert

Politicker

1

sales engineer

I am not in the tech industry so I can only guess. On top of some tech companies over-hiring, I think as the economic forecasts still show some slowing in the future, companies have probably pinched some pennies. Although this might not mean layoffs, it probably means not spending more money on things like new SAAS, cloud infrastructure, etc. which will affect the tech industry.

Kosta_Konfucius

Politicker

2

Sales Rep

2 years ago Tech talent were leaving super quick, companies adjusted and over hired, and now people didnt leave.
Seems like the lower performers or the low performing orgs, got hit hard. And budget when to other groups. Example MSFT funding OpenAI but also doing layoffs

GarthVader

Contributor

2

Assistant to the Regional Manager

Any corp recruiters out there have opinions on this?

Justatitle

Big Shot

2

Account Executive

My thinking,
1.) Companies did over hire and took on more reps than they needed and demand is not where it was a year ago for their products and services
2.) Improving the bottomline boosts the stock price and it's not just a temporary gain. majority of companies that had layoffs saw their stock number go up 10-20%
3.) copy cat mentality, SFDC, Hubspot are doing it why can't we?

GarthVader

Contributor

1

Assistant to the Regional Manager

Spot on with these three.

GarthVader

Contributor

1

Assistant to the Regional Manager

A lot of comments around over hiring / scaling too quickly. Who’s to blame for this in the start-up/ scale-up world? VCs and boards for unrealistic revenue goals? Top down financial models? Inexperienced CEOs? Market pressure to sprint to an exit? What?

Sunbunny31

Politicker

2

Sr Sales Executive 🐰

Somebody read the tea leaves wrong.

But seriously, I think the market looked great, many companies thought they'd need to hire to ride the wave and not miss out on what they thought was going to be a lot of opportunity, and now that the wave is receding, they're scaling back.
In the case of bigger tech, miscalculations on where to invest their time and money, misunderstanding the market. I don't know that it's all one answer, because some bigger tech invested in unproven programs that were vulnerable to a market downturn, while a start up might have found itself in the position of being one of many in the same competitive field, and if you don't stand out, you are done. But any company that didn't plan for the proverbial rainy day and exercise any kind of caution put itself in a bit of a pickle when the economy started to slow a bit.

TheHypnotist

Executive

1

Sales Manager

VC companies pumped INSANE amounts of money into companies, hired people who are piss-poor managers and as a result quota attainment is at all time lows.
VC backers then demand action be taken to protect their ROI.
That's a ticking time bomb that had to explode at some stage = mass layoffs.

StringerBell

Politicker

1

Account Executive

There's also the fact that rising interest rates make all the money funding tech more expensive

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