Silicon Valley venture capitalist Bill Gurley says he ‘hates’ small rounds of layoffs: ‘You get 100% of the pain and very little gain’

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  • Silicon Valley venture capitalist Bill Gurley talked about startups in today’s economy on a podcast.
  • In the interview, Gurley said small-scale layoffs bring more pain and “very little gain”.

In a podcast interviewSilicon Valley venture capitalist Bill Gurley said he “hates” small layoffs of 5-10% of staff because companies “receive 100% of the pain and very little gain”.

Gurley, general partner at venture capital firm Benchmark, was interviewed on startups in Today’s Economy on McKinsey & Company’s “The Quarterly Interview: Provocations to Ponder” podcast series. Gurley supported startups like Grubhub, OpenTable and Uber.

Rick Tetzeli, the editorial director of “McKinsey Quarterly,” interviewed Gurley for the podcast. At the top of the episode, Tetzeli told Gurley that he had just received a press alert that stock trading and investing app Robinhood laid off 23% of its workers.

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Gurley says that, compared to 2001 and 2009, which “had large-scale layoffs”, layoffs today “happen so rarely”. He noted that Robinhood A 23% cut was closer to a “meaningful” layoff size.

Before the 23% cut, Tetzeli told Gurley that Robinhood laid off nine percent of its workforce.

“I hate 5-10% layoffs,” Gurley said in the podcast. “You don’t get any material impact on reducing your spending. Yet you get all the cultural negatives of having done a layoff.”

Gurley went on to say that cutting small portions of the workforce only puts companies “in retweet land” where they end up making “two or three” layoffs.

Dozens of American companies and startups have announced layoffs in recent months, as weak business growth and rising labor costs Think about it.

Despite an unpredictable environment for startups, Gurley said now is the time for people to “build something from the ground up.” And because of the layoffs, “access to talent is much better”, said Gurley, adding that hybrid working has also widened the range of available workers.

When asked if he was worried about a company cutting too many staff, Gurley says startups “are much more resilient than people think” and that it is normal for a company to continue to operate despite the loss of 30% of its workforce.

“You can always rehire” gurley said. “I think 95% of the time failure is the other way around, not doing enough,” he said of the layoffs.

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