[tczMUFlmoNk]

Wow, so, connecting these dots:

- reducing headcount by 50% down to ~70 people = firing 70 people

- at a generous estimate of total burdened cost of $1M/person/year, that's $70M/year

- which accounts for a full 5 years of that war chest

- and, moreover, "at its lowest point" suggests that perhaps Replit has expanded headcount again since; the article mentions that it has done some acqui-hires.

Levels.fyi shows Replit salaries in the $200k–300k range, so even at a 2× burden rate, I think that this is probably a significant overestimate of the costs.

Firing 70 people when you have $100 million that you haven't touched, have raised money on top of that, and have many years of runway for the people you fired… comes together to paint a picture that is, imho, less than flattering.

[ed]

A sustainable business can pay more employees than a failed startup. And pivoting with 150 employees is nearly impossible; all those people were hired for a different business.

[forgingahead]

Hilariously naive comment - "if you have money you should spend it on salaries". This is not a charity, it's a transaction, the salary is paid in exchange for revenue generating activities or supporting activities in a viable business. If the business is only doing 2.7mill in ARR, then it's entirely valid for the whole lot to get laid off.

[Retric]

It’s not about being a charity, the entire point of startups is to trade capital for time to market. If the CEO doesn’t know what to do with 130 people they don’t know what to do with 70.

[forgingahead]

What are you talking about? How does it follow that "if they don't know what to do with 130, they also don't know what to do with 70"? This is literally capital allocation, the decision was that the people laid off couldn't be deployed effectively within this particular org. But maybe they would be effective elsewhere. Don't take this stuff personally, else the working world will always be difficult.

[justonceokay]

Ehh. I don’t love it and it isn’t good optics, but if you can’t find a way to utilize your employeees (such as having a hard time finding a maeket fit for an existing product) then it isn’t your moral obligation to keep paying them. It isn’t clear what employees were laid off ir for what reason either.

[shash]

The original sin was probably hiring those people for a not-yet-clear business in the first place…

[mcny]

Yes, the people who did those hirings should probably be let go as well. But eventually, it is the CEO and the board who are responsible and they seem to never pay a price for their poor action / inaction.

[lacker]

It is not a sin to hire people when you aren't 100% confident your business is going to succeed. That's just how startups work.

Some people are not in a position in their life to take any risk of losing their job, and that's perfectly understandable, but those people should not take a job at a startup.

[vanviegen]

Yes, let's forbid startups! /s

[shash]

Yeah, the point here is nuanced, but let's do an argumentum ad absurdum instead /s

Probably the _best_ advice I got from the entire startup community is, "don't scale without PMF". The saving grace here is that they didn't scale beyond 140 people, so the damage is limited. And they didn't double down on something that would have dropped the whole thing down.

But as a founder, I'd consider it a failure of planning on my part if I had to lay off 50% of my workforce (a failure nobody is immune to, but a failure nonetheless).

[vanviegen]

That's not an argumentum ad absurdum. The whole point of a startup is to try to build a business based on a as-of-yet unproven business model, which usually involves hiring people.

If you need that many people to (dis)prove viability.. I don't know. Hard to judge from the outside, though easy to judge in hindsight.