With everyone in the growth-stage tech and sciences sector battening down the hatches in advance of the continued buffeting the innovation sector is expecting in 2009, we launched an online survey of VC-backed CEOs to take the temperature. Suffice it to say, the answers, not counter-intuitive, were all various versions of "cold."
CEOs RESPOND TO STAFF REDUCTIONS DURING RECESSION
A total of about 60 CEOs responded over the last 10 days, across various industry sectors, more than 90% of respondents located in the Northeast U.S.
The first question and responses show that almost half of the companies have already taken preemptive downsizing measures. It appears that more than 40% of venture-backed CEOs in their leadership wisdom have already in the last several months made adjustments. And 10% more are looking to do so in the next 30 days or so.
The question that wasn't asked but we'll try to do a follow up around is, "When would you make a second round of cuts, and what economic or other indicators would you look at and need to see move more negatively to make these cuts?"
In a quick analysis, given survey responses, it appears the bell curve peak is in the 20-40% reduction in headcount. The group of CEOs who indicated these reductions were approximately half of the 60 CEO respondents.
- 40% or more staff reductions? ~ 10% of total CEOs surveyed
- Less than 20% staff reductions? ~ About 17% of all CEO respondents