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Gunderson Dettmer Lays off Associates Due to Decrease in Demand for Corporate Work for Emerging Companies and Venture Firms
- Tech-Focused Firm Experiences Two Rounds of Layoffs
- Associates Told to Find Other Work Due to Performance Issues
- Similar Layoffs Reported at Peers such as Cooley
- Venture Financing Activity at New Lows in Third Quarter
Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, a tech-focused corporate law firm, experienced two layoffs this fall due to a decline in billable work. The layoffs affected at least 30 associates in the firm’s New York and Bay Area offices, with many of the associates recently let go having been onboarded during the recent rush to hire corporate lawyers.
This news comes on the heels of similar layoffs reported at Cooley, another tech-focused law firm. Gunderson Dettmer and Cooley focus on corporate work for emerging companies and venture firms, and do not have litigation, regulatory, or intellectual property departments.
According to sources in contact with affected individuals, associates were told to find other work because of performance issues. However, sources with direct contact with affected individuals said the cuts came in the wake of a slowdown in work, with some associates billing as little as 10 and 50 hours in October.
The associate cuts come as IPOs virtually disappeared in the second half of 2022, while venture financing activity fell to new lows in the third quarter, down nearly 53% year over year, according to an analysis by Crunchbase News.
“Bay Area firms saw record profits last year, partly because of the boom in the tech sector,” said Summer Eberhard, a West Coast-based associate recruiter with Major, Lindsey & Africa. “Now we’re seeing a substantial number of employees being laid off at tech companies, and it makes sense those companies are also going to cut expenses, including legal fees,” she continued. “Firms with a tech-centric client base are going to feel that impact.”
Another Northern California legal recruiter, who agreed to speak on the condition of anonymity, said that firms have been in wait-and-see mode, reluctant to make cuts because they remember the long-term effect of layoffs during the 2008 financial crisis. However, the recruiter said that news of significant workforce reductions at Meta, Twitter, Stripe, and other large tech companies in the last week could cause firms to change course. “I would not be surprised to see partner exits at some of these
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[tech-centric]
firms on the horizon,” the recruiter said. “Some recruiters are already targeting those firms.”
Gunderson Dettmer responded to only one request for comment on this story. Managing partner David Young and New York leader Steve Baglio could not comment. Northern California office leader Ivan Gaviria declined to comment for this story.
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