Management fails utterly in decision making and employees suffer by layoffs. I don't see a bright future for Digg ahead given these actions.
Edit: This is on the basis that the layoffs will likely not be management.
Edit: This is on the basis that the layoffs will likely not be management.
Management/founders are in the business of making bets. Sometimes these bets don't pay off-- that doesn't mean it's an "utter" failure in decision making... And these employees aren't "suffering". There are two possible outcomes when you go to work for a heavily funded company and this is one of them.
I agree with you about Digg's not-so-bright future.
Ahead of revenue, sure, but they were increasing revenue, traffic, and moving towards profitability. Spending like mad and going nowhere is a different thing entirely.
Like if you have a round of layoffs, but you have employees with faith in the management and the product, you're going to have remaining employees that stick around and work hard. Generally people that don't fall in that mold are going to get laid off in a situation like this.
If you have employees that are sitting there with an expectation that the cpmpany will fail, however skilled they might be, they're going to start looking at other options.
I think what I'm saying is: the initial tipping point in a case like this isn't the layoff, it's the ensuing fallout. One strategy that I've seen fail is using fear to keep people working. A "you're lucky you're still here" attitude has had people (like myself) out the door on the first other offer they find. An attitude of "this sucks, but we have to do it to stay around, no one is to blame" (which Digg seems to be going with) prevents things from going further south. Something like that can even unite the remaining group in difficult times.