Maintaining your people costs means that you freeze hiring but continue to replace your employee turnover. As tech startup turnover is pretty high comparing to other industry, this means you still have talent acquisition work to do. Check out our “Still Hiring?” section to get tips on hiring. 

You can take advantage of this lower hiring period to make your HR team work on key topics such as retention, career paths or training policy. Check our article on tribes on how to structure your HR team here. 

This is the hard part. Downsizing your workforce means that you don’t pursue trial periods or short terms contracts, you don’t replace turnover, and, ultimately, layoff or reduction in force. It’s important to first think about either a person can be transfer to another department. Layoff is to consider when positions are not needed anymore. 

Before considering layoffs, here are some options you can consider to reduce your HR costs:

1. Delay or freeze hiring: Can you move hiring resources to a different quarter? Look at the headcount to delay or reprioritize hires.
2. Reset the senior/junior employee ratio: Depending on the company, senior leaders should make up less than 5% of the headcount of your organization. If it is significantly higher, explore ways to close the gap between the compensation of senior and junior staff.
3. Decrease perks, travel, and expenses.
4. Salary cuts: Especially at the senior level and for those with variable on-target earnings.

This is particularly important for demonstrating support during this difficult time in your employees’ journey with your company. Sharing resources to help them find new work opportunities, such as jobs or training, will make it easier for them to move on.

Here you’ll find all the relevant XAnge resources that can be shared to departing employees: 

• XAnge job board: Redirect them to our job board portfolio to help them find new opportunities.

• XAnge Talent community: This is a community of talents open to all leaders and Head of HR of XAnge startups, bringing together talents selected by their support team. This community allows XAnge to promote profiles as soon as a Head of / C-levels opportunity arises within its companies.

You can also redirect them to other VCs and incubators jobboards such as Station F, 50 Partners, Hexa, Alven or FoundersFuture. 

Some recruiting agencies have talent programs, startup-oriented, that you can share with departing employees such as Avizio, Elinoï, Ignition Program, SplendUp, …

In 2022, compensation skyrocketed and the balance of power shifted to favor talents rather than companies. This downturn and market uncertainty could be an opportunity for startups that are still hiring to attract laid-off talent with great potential.

We’ve seen a lot of layoffs in Big Tech and Scale-ups. It can be hard to determine why certain employees were let go, and whether or not they were high performers.

Here’s a way of navigating this new available talent market (yet not a definitive rule):

• In smaller companies, layoffs are often scattered and less widespread.
• However, in larger companies, layoffs can affect hundreds, or even thousands, of employees. Sometimes, entire teams or squads working on specific projects can be cut off. As a result, there is a greater chance of having A-Players (as referred to in the book “Who: The A Method for Hiring”) available for hire. These individuals may be forced to reconsider their desired compensation to adapt to the job market. This presents an opportunity to acquire talented employees for a lower cost.

Where can I get updates on layoffs at startups? The best resource to date is the Layoff Tracker. You can also get access to the lists of employees here.