Tech startups make cuts amid downturn
Robert Scoble has been discussing venture capital and the fact that the economic slowdown has hit Silicon Valley on his blog from time to time over the past couple of weeks.
Earlier this week, Scoble wrote:
TechCrunch started a page to keep track of layoffs in the startup world. Me? I’m seeing tons of depressing news hitting our economy. That’s what I get for watching CNBC and reading TechMeme. But, there were a group of companies funded this week too and there are plenty of jobs open. It sure is an interesting time to watch the startup community right now.
Yesterday at MarketWatch.com, Therese Poletti described the beginning of a "startup implosion" that included layoffs at companies including Zillow.com, Internet radio station Pandora, and AdBrite. Even more established companies are being affected with pink slips forthcoming at eBay and Yahoo.
TechCrunch reports layoffs this week at Zillow, Pandora, Zivity, AdBrite, Hi5, Jive Software, and Redfin. The week before was Seesmic, and before that eBay.
Other companies affected include Circuit City which could cut 150 stores and thousands of jobs in lieu of filing for bankruptcy, The Wall Street Journal reported Monday.
The Triangle Business Journal reports Novartis will cut 550 sales jobs as part of an ongoing restructuring, the pharmaceutical company said Monday.
Bank of America’s takeover of Merrill Lynch will lead to thousands of job losses, Merrill CEO John Thain told Bloomberg Television on Monday. I previously blogged about Thain and BOA here.
Novartis, the Swiss drug company says the cuts will be made “in a socially responsible manner.” More than half of the cuts will come from leaving vacant positions open, the company says.
Bad News, Bad Technique
Layoffs and loss of business are starting to trickle down to other business sectors as well. This week I heard of reductions involving a company I have been involved with in the past. The handling of the layoff was terrible and definitely not a "best practice" to be followed.
From early morning until late in the afternoon, a small group of employees met with visiting managers from out of town, who discussed the need for austerity in the short term, and the opportunities for growth in the long term.
At the end of these meeting, two associates were called into the office and met with a manager and HR. One of them was told that their position was being absorbed by other personnel. The manager then went to discuss how there were still opportunities out there and that things would be okay.
Finally the associate asked: "If they are going to be doing my job, what will I be doing?"
The reply: "That is totally up to you. You will have a lot of time to try new things. Clean out your desk."
Really bad technique! Even in hard times, companies and HR can do better.
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