Jobster CEO Jason Goldberg announced layoffs at his company yesterday: 60 people, or over 40% of the staff. It reminded me of Sequoia Capital’s only advice about a lay-off: cut once, cut deep.
And now, as an angry mob forms in outrage at the idea that a new company could struggle for its life, every start-up CEO in Seattle has had to wonder if her start-up could at some point get in the same jam.
Redfin is not contemplating lay-offs; in fact we are desperate to hire in every department except G&A. Despite taking too long to expand to Los Angeles, San Diego and the East Coast, our business is growing more quickly than we had projected. That’s not what worries us. What worries us is that, aside from some very good word-of-mouth, we have no idea why our business is growing (I don’t think many startups do).
Half a dozen people – a lot for us — made offers on New Year’s Day. Someone submitted a question about a property at 11:58 on New Year’s Eve. Which means that, while the Jobster news was still on my screen, someone else was in my office on January 2 arguing, quite correctly, that we need more people. I signed two job offers yesterday (and also read that Google is attempting to hire 10,000 people this year).
But once you’ve been through a lay-off, you’ll never hire anyone without wondering if he’ll one day be sitting across from you as you describe his heart-breakingly small severance package. This is why Redfin has hired so haltingly, so carefully. It is why we work so hard, and why, even when sitting in a shaft of sunlight, we wonder about the future all the time.
I went through a layoff at a company I co-founded, so it’s easy to imagine what’s happening at Jobster this week.
We believed we were going to change the world, and in some ways more meaningful but probably less grand than we had intended, we did. For some young employees, many of whom left college or moved cross-country before being hired, the company had been like a family.
Except families never lay off a brother or an uncle. In one day, the company shrank by a little more than 10%. And then all the emotions that worked in Plumtree’s favor – idealism, passion, community – turned against us. Most people weren’t merely down, they were heart-broken (though there are always a few wackos who revel in it). A year or two before our IPO, we showed up on f’d company. A lot.
HR told me not to leave an umbrella, or anything else that could be used to bludgeon me to death, by my office door. Someone left a human turd in the office of our most flamboyant & charismatic executive, who drove his black Corvette home for the day to review security camera tape. He later claimed he could tell who the turd smuggler was by the look on one person’s face as he walked in the door. This seemed like an absurd, paranoid claim until he produced the footage.
The day of the layoff, our CEO called a meeting.
John spoke briefly of endurance, but not success. He did not try to convince anyone that the company was doing well. He apologized for the lay-off and, while all of us executives who had been screaming for headcount over the past year slouched in chairs behind him, took responsibility for it. Then, before anyone was ready for it to end, the meeting was over.