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Is it necessarily a bad sign if a company is laying people off?

My friend works at an international startup which provides companies with a certain payment service (simplifying either making or receiving or following up on their payments, I am not sure). Recently the company has laid off 10% of their staff, 60 people from the sales team in the US. The company has managed to spin this to my friend and other employees as a good thing, that the company is doing really well – they just don’t want to waste resources on getting new customers when they have enough, and that they’d rather concentrate on existing customers and on expanding their services to existing customers. I told her to start updating her resume because in our “economic reality” (i.e. capitalism) a company that is not growing is failing, while a company that is laying people off is already on its way out. She is completely convinced that I’m wrong, that…


My friend works at an international startup which provides companies with a certain payment service (simplifying either making or receiving or following up on their payments, I am not sure). Recently the company has laid off 10% of their staff, 60 people from the sales team in the US.

The company has managed to spin this to my friend and other employees as a good thing, that the company is doing really well – they just don’t want to waste resources on getting new customers when they have enough, and that they’d rather concentrate on existing customers and on expanding their services to existing customers. I told her to start updating her resume because in our “economic reality” (i.e. capitalism) a company that is not growing is failing, while a company that is laying people off is already on its way out. She is completely convinced that I’m wrong, that her company is doing really well and that her job is completely safe (she’s in a back office role).

Just out of curiosity, as I’m not trying to prove anything to her, what do you think? Is a company that is not growing and is laying people off and not hiring new people (so I’m not talking about high turnover) necessarily failing/on its way out?

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