Xanadu’s CEO told his team they are currently do not need to freeze hiring or make cuts, but recognized the need for care to navigate the economic disruption that is happening, particularly in the tech sector.
In an email to staff and later sent through social media, Christian Weedbrook said that the Canadian-based company, just on the cusp of a major fund raise, is in good financial shape. Technologically, Xanadu is advancing, too, with the recent announcement that its quantum computer — which demonstrated quantum advantage — would be available in the cloud.
Weedbrook wrote that the company has funds for usual expenses, along with the budget to reach the next major milestones on the firm’s roadmap.
“So, we are in a good position, but this doesn’t mean we don’t have to be cautious going forward,” Weedbrook writes. “For instance, what if the economy is bad not for a few months but for a few years? Then at the appropriate time we will have to pull certain financial levers to cut costs (from scaling back certain milestones to letting people go) in order to extend our runway until conditions improve and raising more money becomes possible again.”
The CEO does not anticipate — at least currently — the need for drastic cuts.
Weedbrook writes: “As we keep mentioning, we are not currently in a position where we need to freeze hiring (or projects) or do something more drastic like layoffs, but we do need to be thoughtful and cautious when it comes to our spending. We’re thankful to be in a healthy position and have a multiyear runway.”
The company is expecting to tighten the budget, including headcount, according to Weedbrook.
It wouldn’t be the first time that clouds of economic disaster loomed over quantum. In fact, many quantum startups are now in a better position financially after receiving initial — and in some cases advanced — rounds of funding. Weedbrook pointed out that the startup had to navigate the unprecedented economic shock of the COVID pandemic. Supply chain woes and inflation also buffeted quantum’s young and vulnerable startup ecosystem
He added that the company didn’t just weather that economic storm, but actually grew.
Weedbrook writes: “Looking back on it now two and a half years later for Xanadu (and from a cutting costs POV) we had nothing to worry about (in fact we doubled our headcount during this time). We actually lived up to that year’s theme which was to Survive and Thrive. We have always tried to create a company, at least in its first decade, that was independent of the ebbs and flows of the economy.”
Beyond quantum, things are perhaps even more uncertain.
Google initiated a hiring freeze, while other big tech companies are already terminating staff. Whether those cuts ripple out into other sectors, such as quantum, remains to be seen.
The next quarter will be important, according to many economists. However, these experts, themselves, as Weedbrook suggests, are split about the economic prospects. Some suggest the worst is over — others suggest the economic downturn is just beginning.