What to Do When You've Cut Too Far

Many tech companies lay off staff in an effort to reduce expenses, cut deadweight, and/or hone their focus. But what happens when you don't adjust your product roadmap too? It can be easy to find yourself up against a wall trying to deliver on aggressive timelines without the internal resources to deliver. 

Despite the generally positive indicators about jobs right now (in the US unemployment has been under 4% for the longest stretch in over 60 years), within the tech/startup sector, the news has been different since late 2022. TechCrunch reports that a wave of tech layoffs started in Q4 of 2022, ran throughout 2023 and continues into 2024 (their data is based on the tech layoff tracker site Layoffs.fyi).

The list of affected companies includes everything from tiny startups to huge public companies with revenue (and profits) in the hundreds of millions (or even billions) of dollars – the likes of Apple, Microsoft, Amazon, and Sony, among others – who have made cuts despite record revenue and/or profit. At the other end of the scale, many startups have had trouble closing rounds of funding regardless of their ability to hit their growth goals. They are faced with trying to ride out the storm with a skeleton crew or shut down entirely. This has been a direct result of a tremendous slowdown in the deployment of venture capital since Q4 of 2022. That the timing lines up with layoffs in the tech industry is obviously not a coincidence. 

After a long period of scrambling to hire as much talent as possible, many well-funded tech companies are using the cover of the news cycle – uncertainty about the economy, tightening of VC funding, confusion about the impact of AI on technology, conflicting reports about the job market… whatever – to “clean house.” 

Good Intentions

This isn’t all bad, and often starts with a legitimate effort to do something good:

• Reduce waste / unnecessary expenses
• Eliminate unprofitable business units and focus on core competencies
• Improve efficiency by removing layers of management

Unfortunately what often happens is that some of the goals which are harder to measure get translated into tactics that are easier to measure. What begins as an effort to reduce unnecessary expense might become a mandate to cut staff by 20%. As that gets carried out, the intent of the business goal might get lost in an effort to meet an arbitrary numeric goal.

Aftermath

On the other side of those layoffs, how often does a company decide “since we cut staff by 20%, we’re also taking 20% of the features off our product roadmap?” The truth is often that you were understaffed before the layoffs and now you have to deliver the same features in a shorter time frame (it should be easier with a “leaner” team, right?).

However well intentioned, many companies realize after it’s too late that they have cut too deep. They didn’t just cut the fat, they cut down to the bone, and they find themselves in a bind to deliver on an agenda that either didn’t change, or became even more aggressive. Filling that void is tricky:

• Hiring budgets are usually frozen after layoffs, so even hiring for 1 or 2 key positions can get put on hold.
• Rehiring laid off workers is fraught with issues (availability, unwillingness of people to return).
• Recruiting new talent is always difficult and expensive.
• Top talent may be wary to join a company or division group that just went through layoffs.
• Even if there’s budget, it’s sometimes not clear if you really need permanent additions to your team 

Options When You’ve Cut Too Deep

Whether you ultimately want to regrow the team, or just need help getting to the next release, turning to outside help in the interim can be a good strategy. It’s often much easier to get budget approved for temporary help to hit specific, near-term milestones rather than get full-time headcount approved shortly after a layoff.

But just like hiring, finding the right partner to make up the difference can also be challenging.

1. Freelancers. Freelancers are generally cheaper than hiring an agency and they are usually very flexible to work on your terms. But finding candidates can be just as hard as hiring which means it’s even more work if you need to fill multiple roles. Also, employment law is tricky – you may run into trouble if you treat them like employees but don’t hire them. You also run the risk of them leaving you in the lurch if they are actively looking for a full-time position and they leave you when they find that permanent role they are actually looking for.
2. Staffing Agency. Relying on a staffing agency saves you the headaches of sourcing candidates and negotiating contracts with multiple individual freelancers. Unfortunately, you still have to do a lot of the heavy lifting of vetting the people they find. They may be able to help you find multiple people quickly, but those people won’t necessarily have any history working together.
3. Near-shore and Off-shore Dev Shop. Costs are reasonable (or cheap). You can find whole teams to take on any size project independently. But, integrating with your local team can be difficult. You may not get the results you expect if requirements up front aren’t 100% clear. Finding a team you can trust with sensitive projects or data can be hard. They also have a tendency to say “yes” to every request, even when you asking for something outside their core competency.‍
4. US-based Partner. The right team can hit the ground running, will work seamlessly with your in-house team, and despite higher hourly rates than some of the other options will often provide more value to your organization in a quicker time frame.

Uptech Studio Can Help

As a US-based company that acts as a true partner to our clients, we’re a little biased about the right answer. If you’re in a bind because your team cut back too far, we’re eager to help. Uptech Studio has a talented set of people with deep experience in full-stack software development, product management, user experience, and product design. We can embed people to fill individual gaps on your team or put together a complete squad to make parallel progress on a separate track of work. Whatever your particular problem, we are eager to understand what you need and figure out if we have the appropriate mix of resources to help accomplish your goals.

Cutbacks are hard no matter what originally drove the decision – everyone would rather be on a trajectory of growth than have to manage with fewer resources. When you're feeling the squeeze of cuts but still need to deliver, outside help from a partner like Uptech Studio might be just what you need.