Is it wrong that I feel worse for this employee than for the author? He's looking forward to a (probably well-earned) vacation, and he's about to be forced into a job hunt instead.
Trust me, any employee would be happier to be in a stable and improving startup than in one that's going downhill anyway. If they're a dev with startup experience, they'll have no trouble finding a new job and will be better for it.
Don't worry, just be honest and open with them ASAP. The worst thing you can do is keep them in the dark.
I've since learned that you keep your ears to the ground at all times, in ANY company you work for.
You don't sit in your cube with your Dr Beat Headphones on, you listen to office talk. You overhear that phone call from a vendor asking where their overdue payment is. You notice the rise in closed-door meetings between management and the CFO. You make friends with the assistant that cuts the checks. When you've done it long enough, you know where you stand and when it's time to get the hell out before you're caught with your pants down.
Obviously we don't all have the option to bail at any time and find other work, but if this is the kind of culture you're seeing as normal, I feel very sorry for you.
Anyone in this position should -- for their own good -- at least attempt to take a longer view and see if they have options that don't involve constantly sleuthing to narrow down your job's expiration date. Unless you actually like living like this... in which case, hey, it takes all kinds. ;)
That's a very reasonable and business-minded way to approach your employment. You have a very direct interest in the company's success: your paycheck, reputation, friends, etc. Being aware if the company is exploding is simple sanity.
What I'm saying is that it's not a bad idea to understand the health of your employer (commercially, competitively, and financially) and recognize when that health changes for better or worse. If I get up and ask 10 co-workers who our biggest competitors are, I can guarantee 5 of them couldn't answer that question. If I asked the winning 5 which ones were growing and could possibly eat our lunch, 4 of them would fail that test.
Have you ever been let go from a job after being told for months/years that everything was fine and the company was doing great? I have. Luckily, at the time, I had no substantial obligations such as raising a family. Now I do.
I learned from that point on to never be blindsided again. And it's worked well for me so far. And I'm not a paranoid person at all. I sleep pretty well, actually.
That means NOT stringing people along. Sit down and figure out whether you're going to be able to keep people employed at 100% of their current pay and benefits. If you know you can't, then the biggest favor you can do for them is to lay them off quickly so they can start looking for a new job immediately.
If you can make some calls to get them leads at other places that's great, but the most helpful thing you can do for them is to let them go as soon as you know that they have no future at your company.
I've done firing and layoffs and I know it's hard. Delaying it makes it all much worse, for you and the departing employees.
Kinda sucked.