Downsizing Dukaan: What should I do?
This was an interview question at FinTech unicorn for a Director level role:
Imagine, you're a senior executive at Dukaan facing severe financial challenges.
The board has proposed a drastic downsizing plan that includes laying off 30% of the workforce to cut costs.
The alternative is to risk potential bankruptcy within the next year, which could result in the loss of all jobs. As a leader, what do you do and why?
How would you solve this?
Talking product sense with Ridhi
9 min AI interview5 questions
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Raise more money from existing investors with a promise to reach profitability in 2 years. (Or raise it via debt financing)
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Pause all hiring for next 2 years.
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Be honest to your employees. Tell them the financials are bad without using any fancy talk. Just be open. No shame in that.
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Identify redundant roles and give the employees an option to pick a different designation or they can leave with severance.
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Ask your PMs to build features that can bring in revenue. Pause the features that focuses on user aquisition.
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Restrict company travel expenses.
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Restrict engineering and product expense on new tools. Prefer opensource atleast for 2 years.
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If you are the CEO, cut down your salary to 50% for 1 year. Tell that to your employees which may serve as an encouragement.
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Tell your employees that there won't be any hikes for the upcoming financial year. Be open. No shame in that. Some might leave but that's ok.
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Start to hustle like you did when you started the company. Your thought process should be on how to get back up and running, not how to pleace investors.
This attitude is a risk for a CEO because the board can easily fire you. But its a risk that comes with benefits if you succeed.
@MrRobot1992 This is actually a very solid answer.
You do what the investors/board ask you to do. Director level folks don’t have the kind of power to overrule the board. Even the CEO might not have it always
Layoff people, and Have a media appearance and tell them I'm letting go of my family members(cry a little while you are saying that) and blame the investors and board members by shashi tharoor English so that investors ko fark na pade..
Investors and board are kings. Period. Done. If they say downsize these new age founders will downsize.
If I’m a senior executive at Dukaan, I’ll slap the living daylights out of myself and the arrogant entitled founders for demeaning customers, investors. Fire myself as part of the downsizing and ask investors to put in a proper operator.
But all the opinions will be considered and they are the people who has to pick whom to take off from their project level
if it helps.
we choose to cut costs now, turn profitable and ensure survival for years to come rather than playing hero with everyone.
few things.
- as a director its mostly not your call.
- cost cutting was not just layoff but across every single item. we are profitable even on the building we are in.
Most of the time, when these leaders come up with stories of bankruptcy is a lie. If they say 1 year it usually means 3 years. These guys usually fire people to shakeup the employee morale, so that people who didn't get laid off can work like donkeys or to show the board/investors that they can/are take tough decisions. To show them they are doing something.
Actual answer is to do whatever they ask but politically correct one would be to be a hero and come up with some middle ground to save the day.
Dukaan badh kr do