You might think yes, but the data suggests not always.
It’s no longer news that companies and economic spectators are spooked by what is believed to be a looming economic downturn.
Even corporate executives from JP Morgan’s Jamie Dimon to Tesla’s Elon Musk have cautioned investors to be wary of the downturn. After what seemed to be a never-ending joyride of rising stock prices, booming private valuations and “easy money,” corporate leaders have started intensifying alarms about high inflation and impending interest rate hikes.
As tech stocks have crashed on public markets and private company valuations have taken a hit, investors are writing cheques more cautiously while urging their portfolio companies to preserve cash. It’s an unfortunate time to be fundraising, particularly for those with a high monthly burn rate.
Over the past month, public and private tech companies have been announcing layoffs across regions and sectors. Employees from Unacademy (India), Carvana (U.S.), Klarna (Sweden), Getir (Turkey), and Avo (Israel) have been impacted by workforce reductions. Larger companies such as Twitter and Meta are also instituting hiring freezes.