Why Layoffs at most Startups are unavoidable...

When startups went about hiring talent, it made the headlines for aggressive poaching strategies and the entry level payouts to graduates from top engineering and b-schools. And yes, not to forget the tempting incentives and flexibility. The buzz was around attracting the best talent, with most CEOs expressing how important their employees were for their success. Cost was nothing, as long as they got the best people.

Now when investors are doing what they do best, i.e. ensuring markets correct themselves and valuations are brought to realistic levels, the focus on talent, compensation & benefits seems to have died down, and the buzz is about 'business sense' and 'economic feasibility' #costlytoignorecost

However, layoffs should not be treated with fear. What most journalists, and more importantly, employees, forget is that, in the end, it is all about the economics rather than only the people. This is a the grave reality, and that is what is most oft forgotten. Any business that goes on hiring without a plan in place is creating a recipe for disaster. Getting the best minds and leaving them to roam about, without knowing what to do with them or how to manage them, is the first step towards the last. (Money can only 'buy' talent, not utilize it)

Also, people switch to startups knowing the rewards, and the risks that are associated with them. If they are oblivious to this naked truth, then they were mostly fooling themselves, and if they still create a hue and cry about being laid off, it shouldn't be given much importance since it was part of the deal they made.

And as far as our new-age CXOs chatter about talent, incentives, career paths, and how critical people are to their success, it is nothing but fodder for journalists. Only a handful of them actually understand this, and it is only these few who shall probably go on to make their mark in this digital age.