News: Sequoia layoff: Talent team cut by a third as part of restructuring plan

Strategic HR

Sequoia layoff: Talent team cut by a third as part of restructuring plan

In the recent years' boom, many companies went on a hiring spree, hiring more personnel than they actually required. Now, such firms, including Sequoia, are taking measures to rectify this situation.
Sequoia layoff: Talent team cut by a third as part of restructuring plan

Last Friday, the renowned venture capital firm, Sequoia, carried out layoffs within its operations team, affecting seven employees.

Sequoia's Chief Operating Officer, Sumaiya Balabale, verified that the decision has impacted approximately one-third of the firm's talent pool, which assists in recruiting for startups in its portfolio, reported Forbes. 

This comes after the departure of Jaime Bott in April, who served as the head of the talent team for twelve years.

According to two sources, the layoffs at Sequoia are part of a broader trend among venture capitalists following the industry's boom, which ended in early 2022. As the market downturn persists, Sequoia is not the only firm reducing its previous expansions. 

Y Combinator also laid off 17 employees earlier this year while closing its late-stage startup fund. These cutbacks mirror the current situation in the VC-backed startup landscape, where layoffs are becoming more common as funding becomes scarce, and companies are striving to sustain themselves.

“Particularly during the peak years of 2021 and 2022, the talent needs of our portfolio tripled. As the market slumped, a standstill came and our companies came down with incoming requests and hiring needs from us,” Balbele told Forbes, noting that Sequoia experienced a significant increase in talent endorsements, doubling its numbers. However, with the stagnation of startup hiring, the need for reform within the company became inevitable.

Jordan Ormont, talent partner at Menlo Ventures, remarked that such moves should be expected. He explained that during the recent boom years, many companies hired more employees than necessary, and now they are taking steps to rectify that situation. However, he pointed out that not every firm is downsizing; Menlo Ventures, for instance, is still intentionally expanding its talent and business development team.

“During the boom in recent years, companies hired more people than they needed and now they are trying to correct that,” he said. 

Balbel characterized Friday's layoffs as a component of a more extensive two-year "restructuring" initiative within the company. The goal of this restructuring is to shift from providing one-on-one support to a model that can cater to a larger number of founders simultaneously. 

Some examples of this transformation include its Ark program, tailored for seed-stage startups and builders, which involves a network of operators providing valuable mentorship to founders.

In the past, according to Balbel, Sequoia followed an "agency-based approach," expanding its talent-focused workforce to cater to the demands of its founders. However, the new model is designed to enable Sequoia to offer more scalable support, regardless of whether it's during peak or non-peak periods.

Since Roelof Botha assumed leadership from longtime manager Doug Lyons last year, Sequoia has been experiencing a turbulent transition. At an industry event in January, Partner Alfred Lin revealed that the company had lowered management fees for limited partners on its new investment vehicles. 

Additionally, in March, Sequoia provided the LP with an opportunity to withdraw early funds from its evergreen fund. The evergreen fund was launched in late 2021 to allow the firm to hold public shares for more extended periods compared to traditional venture capital firms, as reported by The Information.

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Topics: Strategic HR, #HRTech, #HRCommunity, #Layoffs

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