05 November 2008

LinkedIn Layoffs

TechCrunch has just reported that LinkedIn "will be cutting 36 of 370 employees, or around 10% of the company." These days, it's not a surprise. As a customer of LinkedIn, I have a slightly concern about LinkedIn's financial health, but I don't feel that they are about to go out of business. Obviously, it's a tough world for VC backed startups right now.

My speculation is that since the bulk of their revenue is from companies which are recruiting, the number of such employers willing to renew their job postings and search subscriptions are probably starting to drop. LinkedIn would presumably start cutting back on customer service people, perhaps on some sales and marketing folks, and any dead weight. Every company has at least 5% dead weight amongst the staff.

In HR, we have a saying, "there is such a thing as good attrition."