Last night Techcrunch posted that LinkedIn was laying off 10 percent of their staff. Just a couple weeks ago the company announced that they had raised $22.7 million in a round of funding from SAP Ventures, Goldman Sachs, and McGraw-Hill. At the time it wasn’t clear that the company wasn’t laying people off, simply that they were slowing their hiring process.
Now 10 percent is being chopped. While we may have a new President-Elect, the economic conditions still appear to be worsening for the time being. As such startups are tightening up, cutting back on hiring, and an increasing percentage are reportedly firing anywhere from 5 to 20 percent of their staff. We have no reason to believe that this trend won’t continue.
Just this morning Peter Kafka reported that News Corp is experiencing a softening in their display advertising on MySpace. They are expecting that to continue into the first two quarters of next year. Also this morning, while being interviewed by John Battelle at Web 2.0 Summit, Paul Otellini of Intel suggested that general consensus is the first two or three quarters next year will be hard.
It’s clear that no companies, including social networks, are immune to recessionary pressure. As companies push through the next three quarters, there is a very good chance that we’ll see cutbacks continue.