Behind tech layoffs lay systemic cash flow negative companies

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Medium | Gonzalo Espinoza Graham | May 31, 2020

public companies and covid layoffs - Behind tech layoffs lay systemic cash flow negative companies

Since the pandemic started, there’s been approximately 61,260 tech layoffs [1]. Close to 30% of the layoffs came from public tech companies, 85% of those companies are unprofitable.

No deep insights here, just the simple fact that the once growth hyper focused startups grew to be publicly traded companies without ever sorting their unit economics, and now their mediocracy has real consequences on real people.

See:  How Regulation Crowdfunding Stood up to the First Weeks of Coronavirus – Almost Opposite of the Public Markets

This includes household names such as Uber, Lyft, Casper, and Eventbrite which we’ve all used, and begs the question: why did we allow so many unprofitable companies IPO? When did losing money become acceptable and the new normal for publicly traded companies?

Here’s to a new generation of entrepreneurs who prioritize building sustainable businesses.

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