Do Recent Startup Devaluations Signal Tech Market Trouble?

A young Black woman leads her team in a project meeting

By

INTOO Staff Writer

Categories

tech bubble silicon valley san francisco skyline

Silicon Valley has become the mythical land of “unicorns”–the term coined to define the 100+ tech startups valued at $1 billion or more. But in the past few weeks that fantasy hit a few snags with news of devaluations of prominent tech unicorns, including social messaging app, Snapchat, and HR benefits startup, Zenefits.  

As Fortune and the WSJ report, Fidelity has marked down the value of its investments in Snapchat by about 25 percent, and of Zenefits by about 48 percent. According to the WSJ, Zenefits has cut employee salaries and curbed employee benefits.

This news comes soon after several recent layoffs in tech, helping fuel talks of an impending pop in what some perceive is a more volatile tech bubble than the dot-com blow of the 90’s.

Related: Webinar – 3 Keys to Protecting Your Brand in a Downsize: Lessons from the Tech Industry

NYT tech and business writer, Nick Bilton, illustrates in his recent Vanity Fair piece how the tech bubble debate is hitting home, becoming the central topic of both opening address and casual conversation at a recent glitzy Silicon Valley event hosted by renown VC firm and major Zenefits-backer, Andreessen Horowitz.

signs of tech bubble silicon valley

Related: How to Prepare for Layoffs – 3 Tips for Tech Companies

One of the most notable points Bilton makes is in reference to the 1,070-ft Salesforce tower now under construction and soon to eclipse the hallmark peak of the Transamerica tower, a defining symbol of San Francisco’s skyline for nearly four decades. Bilton explains why monuments made in the name of empire building may actually serve as signs of bad times ahead:

“Vikram Mansharamani, a Yale lecturer and author of the book Boombustology, has argued that virtually every great bubble bursting has been preceded by an attempt to build the tallest buildings. Forty Wall Street, the Chrysler Building, and the Empire State Building were under construction during the onset of the Great Depression.”

INTOO Staff Writer

INTOO staff writers come from diverse backgrounds and have extensive experience writing about topics that matter to the HR and business communities, including outplacement, layoffs, career development, internal mobility, candidate experience, succession planning, talent acquisition, and more.

Learn how to effectively build and transition your workforce.

Latest Posts

Developing Employee Competencies
Developing Employee Competencies

Employee competencies are the skills, knowledge, and abilities that enable individuals to perform effectively in their roles. These competencies range from technical expertise to soft skills like effective communication, problem-solving, and adaptability. In today's...

The Importance of Cross-Departmental Collaboration
The Importance of Cross-Departmental Collaboration

Businesses today commonly have separate teams dedicated to different functions—such as marketing, finance, operations, and IT. As a result, cross-departmental collaboration is crucial to break down silos and encourage effective communication. When departments work...

The Importance of Women in Leadership
The Importance of Women in Leadership

Women in leadership are essential for driving organizational success, fostering innovation, and promoting economic growth. According to McKinsey & Company, businesses with greater female representation in executive roles are 25% more likely to achieve...

The Features and Benefits of Top Outplacement Companies
The Features and Benefits of Top Outplacement Companies

It’s difficult enough to administer layoffs without also having to find the right outplacement provider. Knowing what to look for and what top outplacement services offer will simplify your search and allow you to breathe more easily, knowing you did the right thing...

What Are Career Milestones? 
What Are Career Milestones? 

Career milestones are significant achievements or benchmarks that mark progress in an individual’s professional journey. These milestones can include promotions, acquiring new skills, completing major projects, or transitioning into leadership roles. They serve as...

Transferable Skills to Thrive in Today’s Evolving Workforce
Transferable Skills to Thrive in Today’s Evolving Workforce

The workplace is constantly shifting, and the need to adapt has never been greater.  A career journey can span multiple positions within a single organization or with several employers, across industries.  Each time an individual makes a career transition, their...

What Are OKRs? A Comprehensive Guide
What Are OKRs? A Comprehensive Guide

Objectives and key results, or OKRs for short, are a goal-setting framework that helps organizations align their strategic vision with measurable outcomes. They consist of clearly defined objectives that outline what you want to achieve, paired with key results that...

How to Make Employees Feel Valued at Work
How to Make Employees Feel Valued at Work

Behind every successful organization are individuals who contribute their passion and purpose to get results. While each team member has their personal motivations that drive them, when they feel recognized for their contributions and that their voices are heard, they...

Workplace Mentoring: A Guide to Empower Your Team
Workplace Mentoring: A Guide to Empower Your Team

Workplace mentoring is a professional relationship in which a less experienced employee (the mentee) receives guidance, support, and advice from a more experienced or knowledgeable colleague (the mentor). This relationship goes beyond teaching the skills specific to a...

Subscribe to our newsletter!

Learn about career solutions and trends that matter to the HR community.