Andreessen: CEOs arbitrarily choose layoff sizes based on PR optics
Marc Andreessen · Startup Building: Challenges & Opportunities · May 2, 2024 · at 31:24
Marc Andreessen is a co-founder and general partner at Andreessen Horowitz. He describes how corporate leadership teams decide on single-digit or low double-digit workforce reduction targets.
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“There's like all this lore and kind of stories get told, and so it's like, okay we're gonna do a layoff. We need to cut costs and we knew that we overhired, and we got sloppy shit all over the place. And so we're gonna do a layoff, and like, we don't want to do a five percent layoff, because like, layoffs are traumatic, and so you don't want to like, five percent is like too, too low. But like, boy, if it's double digits, you know, that's really going to damage morale right? That's going to feel really bad. And so we'll do eight percent. Or they'll, they'll have that same conversation. They need to do more. They'll say, well, you know, we need to do more than that. But like, you know, boy, at 15%, it's really going to hurt. So we're going to do 13%. And so you get this like nibble around the edges thing where they're literally backing into almost this intangible idea of like some sort of minimax number where it's going to be enough to get credit, but not enough where people get mad.”
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