In the beginning of the pandemic, we learned which companies were unprepared to handle a cataclysmic event. Now, as the world slowly starts to reopen in light of vaccinations, we’re learning which companies that soared during the pandemic also lost their discipline amid it.
Over the past two years, tech rightfully became more critical than ever for the services that it provided to the average human, whether it was empowering an entirely distributed workforce or helping us get access to health services via a screen. It also became vulnerable. Pandemic-era growth has always had a caveat: The tech companies that found product-market fit, and demand beyond their wildest dreams, are the same tech companies that knew their win was at least partially dependent on a rare, once-in-a-lifetime event that (hopefully) would go away one day.
Every growth round, mega-valuation, impressive IPO pop and total-addressable-market bump gave the appearance of strength amid the crisis. But the same tailwinds that drove so much value creation also quieted money-saving conversations and planning for a future deceleration.
Yet, a reckoning, or at least a re-correction, is starting to play out, as shown by recent news from Peloton and Hopin.
Fitness hardware company Peloton, which went public in September 2019, announced this week that it laid off 2,800 people, a cut that also came as CEO John Foley resigned from his role. I haven’t seen a layoff of that magnitude since Airbnb laid off 25% of its workforce at the beginning of the pandemic, citing revenue declines amid travel bans and COVID-19 concerns. In Peloton’s case, however, the layoff is less of a response to a pandemic jolt and more of a deflation after experiencing a surge of pandemic-fueled demand.