Another trite and predictably facile memo from people who really ought to know better. Furthermore, if one is going to say “fire as many employees as you can without fatally damaging the company” then why not just say that, instead of dressing it up in quasi-innocuous terms? We all know VCs panic when the world doesn’t accommodate their desire for easy exits, so there’s very little in the way of reputation to salvage at this point. Therefore getting to the point would be better than making the point obliquely in a manner everyone and their pet hamster can see through in a fraction of a second. No doubt the partners at Sequoia believe they are “smart and stable geniuses” but in fact they’re just knee-jerk kiddies with MBAs who don’t really understand long-term value creation at all.
By way of contrast, look at how most companies in Germany’s Mittelstadt handled the last financial crisis: they retained every possible employee (because people aren’t just fungible units on a spreadsheet but hold important institutional knowledge) by reducing overall time on the job and by reducing salaries throughout the company (yes, even the executive team — gasp, horror!). This meant they could ramp up again very quickly as the situation returned to normal, and stole a march on US competitors who were scrambling to replace “non-essential” personnel they’d fired several months earlier in their short-sighted attempt to maintain the bottom line above all else. US companies are spreadsheet-driven but they ought to be value-driven. There’s a huge difference, but alas few people in the USA understand what it is.