True story · retold with care
Buffer hired ahead of the plan, then let ten people go
In June 2016 Buffer made ten people redundant, about 11% of the team. Joel Gascoigne published the whole thing on the company blog: what had happened, what it had cost, and the numbers underneath it.
The team had grown faster than the business had validated, built for the company Buffer expected to become. He and his co-founder cut their own pay by 40% and cancelled the company retreat, saving close to $500,000. The redundancies saved another $585,000, and together that is what kept the bank balance away from zero.
What went wrong
Headcount was set against a forecast rather than against what the business could already support. Salaries do not pause while a plan catches up with them.
The habit that prevents it
Hire against demand that has already lasted, not against a good quarter. Check any hire against your cash cover before you make the offer.
How you'd see this coming in Punctual
Punctual shows payroll cost against real profit and cash, so you can tell a lasting trend from a good few weeks before you commit to a salary you cannot easily undo.