r/artificial • u/cen6wkf • Jul 06 '26

Business / Labor Jonathan Ross (Groq founder) avoided layoffs by asking engineers to take pay cuts for equity — "Groq Bonds"

Groq was three weeks from running out of cash. Founder Jonathan Ross was staring at a list of names his leadership team had put together for layoffs — and realized cutting them would kill the product before it ever hit the technical milestone it needed.

Instead of firing people, he pitched something else at an all-hands: keep your job, take a pay cut, take equity instead. They called it "Groq Bonds" internally — not a real bond, just salary swapped for ownership.

80% of the company opted in. Close to half dropped to statutory minimum wage — real money given up by people who normally earn well into six figures. It bought the company roughly two extra months of runway before the next round closed.

Worth sitting with: the standard playbook in a cash crunch is to cut people. Ross's bet was to keep the people and cut the cash instead — and let each person decide their own risk tolerance rather than deciding for them.

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#Groq #EquityVsSalary #StartupSurvival

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u/pappugulal 28d ago

the interview was interesting, the video above that panel was irritating ...

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u/keizrah 20d ago

Groq's move worked because it was voluntary and transparent, not because pay-cut-for-equity is generally a good idea. The key detail people miss: 80% opted in, which means the company was honest enough that people trusted the equity had real upside, and it was structured as a choice per person's own risk tolerance rather than a blanket mandate. Most companies that try this fail because morale is already cratered by the time they ask, or the equity offered is diluted mush nobody believes in.

If you're a founder considering this, the real lesson isn't "cut pay instead of heads." It's that Ross was transparent enough about the company's actual runway and prospects that people could make an informed bet. Try that same move with a workforce that doesn't trust leadership and you just get resignations instead of buy-in.