Silicon Valley is getting ready for the consequences of the post corona lockdown. Some of the things planned are job freezes, salary reductions, and layoffs. M.Rangaswamy, a famous venture capitalist and entrepreneur has said that many IT startups of Silicon Valley may follow this way. But this could be different with the tech giants like Facebook, Google, etc.
The startups are making sure that they have enough cash to survive for the next 18-24 months, considering the current situation a poor one to raise money. Even if they try to do so, their company valuation would be very less. He said that in the next few months, the unemployment will be high in the Bay area, which happened previously in 2007. Even at that time, it didn’t happen much. But now it will be a tough period, which can be most similar to 2000.
He also said that even if the situation becomes worse like the prediction, we cannot expect half of the Silicon valley to lose jobs. It is just that 5% or mostly 10% will be unemployed. Some of the workforces might be taking a pay cut of 10%.
Companies like Google and Facebook may not do anything at all. This scenario is exclusive to startups, Rangaswamy said. The worst-case scenario with the big companies is they might freeze the hiring for some time. These big companies have enough cash to survive.
Rangaswamy also said that Indian employees with H1B visas can expect a less impact as they are already saving enough money for the businesses. He concluded by saying that unless there is a dramatic downfall of their businesses, the India IT employees can expect their jobs to be safe.
Any company which survives on tourism, travel, etc might see a huge dip in their business, according to M.Rangaswamy