Silicon Valley prepares for layoffs, reduction in salary and job freeze
Companies that are selling to travel and tourism industries will see a huge dip in their business fortunes
Washington: The Silicon Valley, hub of Indian entrepreneurship that showcases excellence of Indian IT professionals, is bracing itself for a post coronavirus period with layoffs, pay cuts and freeze on new jobs, a top venture capitalist has said.
M Rangaswami, well-known venture capitalist and entrepreneur, said that while the IT giants like Google and Facebook might have a different approach, many of the startups were instituting either layoffs or reduction in salary or a combination of both.
"They are all making sure that they have enough cash in the company for 18 to 24 months. This is a bad time to raise money. Because if they go try to raise money now, they'll get very poor valuation," Rangaswami said reflecting on the mood among startups in the Silicon Valley.
"So, I think over the next month, you'll hear a lot of unemployment picking up in the Bay Area, which has not happened since 2007, 2008. Even then, it didn't happen much. But this will be the first time you'll see that in a long time like after the 2000 bubble. This will equal that type of situation," he said.
Responding to a question, he said, he cannot talk for the big companies like Google and Facebook.
"They may not do anything. But this is amongst the startup community. Definitely layoffs and reduction in salary," he said.
"Big companies will probably freeze hiring. That's what they do because they've already got big businesses. They have a lot of cash on hand, and they can weather the storm," Rangaswami said.
Companies that are selling to travel and tourism industries will see a huge dip in their business fortunes.
Rangaswami said the Indian IT professionals on H-1B visas might not see much firing because they are already saving a lot of money for their business.
"They are already in jobs where they're saving customers money. So unless their business declined significantly, these people will still be needed. It's only if there's a dramatic downturn of the business. And those H1B workers are in that line of business and they don't need them anymore, then of course it would make it," he said.