Daily Thoughts

After two weeks, Silicon Valley companies continue to announce layoffs.

From The New York Times Technology section:

It’s week two of the great Web 2.0 reality check, and so far it’s unfolding about as one might expect. Layoff announcements from start-up companies came fast and furious, with companies such as AdBrite, Zillow, Pandora and Redfin cutting anywhere from 15 to 30 per cent of their staffs. There were some big ones too (1,500 people at eBay) and some big ones coming up (watch Yahoo!).

The job cuts are in response to the abrupt realisation, which I wrote about last week, that the global financial crisis was not going to leave the internet economy unscathed. Venture capitalists are warning their companies that they should act fast, cut their cash burn and figure out how to survive. Duly noted, said the entrepreneurs, and one result is layoffs. More…

At Financial Times they report of the optimism of many dot com CEO’s fading fast.

…The rapid reversal in mood has reawakened memories of the dotcom bust in 2001 - though the entrepreneurs making the redundancies claim a much greater sense of realism than was shown during the first great internet shake-out, when many web companies reacted far too late to the downturn.

“It’s the need to get profitable immediately - we’re heading for some tough times,” said Iggy Fanlo, chief executive of AdBrite, an online advertising network that dismissed 40 of its 100 employees late last week.

“I made the decision to go very deep, very quickly so we won’t have to do it again. It looks like we’re having a record month, but I can’t put my head in the sand,” he continued. More…

Is it just me, or is it hard to feel sorry for these people? Many of them multi-millionaires in their 20’s, their wealth drove real estate prices into the stratosphere in their search for the perfect geeky life. The equivalent of my $80,000 home in Florida was selling for $400,000 there.

So now with their little bubble bursting around them, what will these kids do? Most of them are only in their early 30’s, so it’s not like their lives are over. Still, you have to wonder if they will ever be able to settle for a normal job with a normal salary again.

We can only hope that the lessons learned with stick with them, but you know what…they probably won’t.

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