"We Grew Too Fast" Is Not a Valid Excuse For Layoffs
November 7, 2022

"We Grew Too Fast" Is Not a Valid Excuse For Layoffs

by Brian de Haaff

A friend of mine was just laid off. The reason given by the company? "We grew too fast." The transition has been painful of course. And my friend is certainly not the only one in tech these days fretting about finding a new role that is aligned with their values. What is most frustrating to me, though, is that this was a solid business. The layoffs could have been avoided. Instead, the losses were the result of greedy company leaders and investors with a penchant for ignoring history.

Working in Silicon Valley since the 1990s, I know the cycles — felt the ups and downs firsthand. But that does not make witnessing others experience those hard times any easier.

Earlier this summer I wrote about the large-scale layoffs happening in tech. Unfortunately, we are still seeing weekly announcements from companies shedding a meaningful number of employees. And the troubles seem to be deepening as we head towards the end of the year — extended hiring freezes, more rescinded offers, significantly reduced budgets, slashed annual bonuses.

Much of the turmoil was unavoidable. The last few years were incredibly trying and dynamic for most businesses. Often the public reasoning behind layoffs and hiring freezes from CEOs is a push to stabilize the business, streamline operations, and cut costs. But there is another theme woven throughout many of these statements — the idea of "growing too fast." The problem is that the people who helped grow a business are often the ones first impacted by its leaders' poor decisions.

“We grew too fast” should not be used as an excuse for layoffs — when unnatural growth was the intention all along. Choices were made and costs soared to pursue a certain trajectory.

Growth-at-all-costs thinking is pernicious. There are different flavors — chasing venture capital, pumped up valuations, spending money you have not earned, never caring to turn a profit. But history repeatedly demonstrates that it never ends well. Good people (and their families) almost always get hurt. Customers are let down, colleagues are collateral damage, partners are disappointed.

“We grew too fast.” Despite the “we,” this is agentless and abstract reasoning that cloaks intentional (if unwise) actions:

  • We lost connection with our purpose

  • We put hype above value

  • We prioritized unsustainable hiring growth

  • We encouraged wasteful behavior

  • We acted without discipline

Spending lots of money to stoke unnatural growth is not viable long term. Aiming for sustained growth — built on value exchange and profitability — is enduring.

Do you want to build a lasting business? Are you creating what customers actually want to buy and use? Is the work you prioritize delivering value to the business? Are you using resources wisely? Is the organization a healthy environment where people can achieve their best? You have to continually ask if the investments you make are legitimately aligned with where you want to be in the future.

I am a realistic optimist by nature. I also know that most lessons have to be learned more than once to take hold. This will not be the last time that we see this kind of "we grew too fast" fallout in tech. But for all the stumbles, there are many organizations who will emerge strengthened. It is not too late for companies who are ready to recenter around value — choosing what will sustain the organization for the long term, then working iteratively to achieve it. And I hope that people bruised by recent layoffs join those companies.

I know from experience it is possible to grow a high-tech company fast and be highly profitable — without compromising your most important principles. That is why Aha! started the Bootstrap Movement.

My prediction is this: We will once again begin to see an emergence of more self-funded, highly profitable, and focused businesses. These are the companies who build a sustainable business with a bootstrap mindset, who follow a value-based approach to product development, and who give back to their communities.

There is no panacea that protects against financial bubbles and snake-oil stories of today's tech gamblers. However, there is courage in self-reflection by both company leaders and people who have been impacted by irresponsible decisions. I know we all can treat customers, colleagues, and our communities with more care.

Aha! is 100 percent remote, profitable, and hiring now.

Brian de Haaff

Brian de Haaff

Brian seeks business and wilderness adventure. He is the co-founder and CEO of Aha! — the world’s #1 product development software — and the author of the bestseller Lovability and The Startup Adventure newsletter. Brian writes and speaks about product and company growth and the journey of pursuing a meaningful life.

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