If your employees are dumb enough that they interpret a 70% cut of the workforce as a sign that your company is stable, you're doomed. It's hard to imagine the dumbest person in the world interpreting that as a sign of stability.
When I eventually quit, senior management then explained how I was part of their grand comeback plans and offered a salary bump, and in my mind, all I could think of was how they were trying to balance a cost equation.
People far more talented than me had landed pink slips, presumably because of how "expensive" they were for their "output".
That may be the right call for longevity of the business, but I could easily be the one being disposed after my valuable output is put to use and my expense-output is reconsidered.
I was genuinely scared when my time came, and it took another 4 months, but I consider myself lucky but am uncomfortable with the fact that a previous manager of mine at one of those large/profitable companies which had one of those fishing job postings, saw my resume and swapped me for one of his under performers (aka someone got laid off at the end of the fiscal year, and I got hired). And I took a ~40% pay cut for the privilege.
Literally the only people who were getting hired in my area where situations like that. Never assume you will get hired during a downturn unless you have a really solid network of people who will risk their own positions for you and/or work at companies that treat people like cogs to be replaced if they can get a cheaper/more effective cog.
I was at another stable but small company during the 2008 downturn, and I sadly had to turn away a lot of people I would have loved to work with again, but we were on a hard hiring freeze (the ones where upper mgmt breaths a sigh every-time someone leaves of their own volition because it gives them a bit more breathing room). So these times hurt no matter which end of the table your on.
So, don't assume the job market will remain the way it is today.
I was an independent consultant from a 2001 dot-bomb layoff to the beginning of 2008. I saw hard times coming and took a job with the most bomb-proof client I had, and it worked out really well.
Now my problem is that I have to move to something, and not away from something. If the company and job aren't intriguing I have a tendency to perform not as good. And I still like my employer and manager, the latter more than the former. Plus, I need to be able to show something before switching jobs.
Something to think about on the next weeks and months, especially with a family and commitments. As I said, the market is good. I wouldn't have much trouble finding something if I really wanted to. On the other hand, having a stable income after a failed attempt on a start-up is quite nice, and I'm out of the probation period.
As someone who has witnessed repeated smaller rounds of layoffs, I also began job hunting after the pattern was evident. A layoff is an inherit signal that management made mistakes. Sure, there are probably better ways to handle it than others. However there is no getting over the fact that prior mismanagement now necessitates drastic measures to recover from it. That is going to be enough to get some people looking for an escape regardless of your approach.
The founders did not adequately think through the ramifications of their decisions, and it did seem (as another commenter in this thread succinctly put it) that they viewed everyone as very predictable NPCs in their narrative.
I believe Ben Horowitz made a similar decision and a similar pitch to his employees that he recounted in The Hard Thing About Hard Things. I don't remember Horowitz getting into the depth of the cut but I remember survivability being a stressed point.
In particular, many of the employees will have options that are obviously underwater. Any belief they had in dreams of billion dollar valuations will be gone.
It’s almost as if the blog poster would have a vested interested in seeing a massive cut.
No person should have assumed stability in a company that was not yet turning a profit. I'm not saying they are bad companies to take a gamble on, but understand they were/are a gamble. VC money suddenly drying up was part of the that gamble.
Put another way, if you couldn't staff right in the good times, why would remaining employees trust that your "one big cut" will work now? Hint: they won't
This is also why a company should cut a little more than needed, so they have some cushion for things to get worse before getting better again.
Now if the plan is going to end in flames anyway, it still seems like a great reason to stick around and absorb the knowledge and experience.
I'm a fix-it person and would love the opportunity to turn a company around - it's like the ultimate challenge.
Recovering from a 70% layoff only happens once in a blue moon, and usually only when a founder led company that has already reached revenue and product-market fit makes a well executed hard cut that does an exceptional job at keeping and supporting the core team amd managing emotions.
In any other more chaotic situation, the product/emotion/revenue death spiral ensuing is usually impossible to stop.
And then there's the 3x increase in workload.
I did build up my savings, actively engage my network “just in case” and updated my resume.
Once the final hammer hit and we got acquired for our customer list and everyone got laid off. We went to lunch, hung out in the office after our layoffs and from looking at LinkedIn, everyone had a job within a month.
At each round of layoffs, people reached out to their network and had jobs quickly.
I met a recruiter for lunch that following Monday and had an offer Thursday.
No matter how your company is doing, you should always “keep your running shoes around your neck”.