Earlier this week, Peloton laid off almost 3,000 employees after demand for its signature exercise bike plummeted. And the layoffs mirror the path of many startups that grow quickly, only to have to scale back significantly.
Peloton was not the only company to downsize just a month into the new year. Glossier, a beauty brand that thrived in the early days of direct-to-consumer online sales, laid off more than 80 corporate employees in January following its own explosive growth. Most of those who were laid off were tech workers, TechCrunch reported.
The common denominator among these startups is the need to balance a rapid increase in product demand with strategic staffing. Ask any startup founder and they’ll confirm that Glossier and Peloton are far from the only ones dealing with this challenge.
Thanh Nguyen, founder and CEO of OpenComp, said he’s familiar with the issue, even as the leader of a company whose business is compensation and hiring. “The challenge when you're high-profile, like Glossier and Peloton and many other companies, quite frankly, is [that] growth is a big agenda when you take on financing,” he said.
Nguyen sat down with Protocol to discuss the latest news, where most startups go wrong and how you can develop a more strategic hiring plan.