European venture capitalists have started to advise start-ups that they can cut costs and keep their employees employed. another recession is inevitable. They are the same as their counterparts in Silicon Valley. doing the same.

After a record 2021, which saw IPOs and massive funding rounds in Europe, many of Europe’s most important start-ups are now laying off large numbers of employees and dramatically scaling back expansion plans.

The general rule of thumb is to “extension”. [the]CNBC spoke with Michael Stothard of Firstminute Capital, a London-based early stage investor. He said that they need to either cut costs or raise capital as much as possible.

Nathan Benaich is a venture capitalist. Air Street CapitalLondoner, said the overall industry has advised companies to be conservative and not encourage the “go-go” plans of the past.

He told CNBC that he believes it is more sensible to concentrate on what’s going on in the company today than on planning for the future.

CNBC interviewed Fred Destin about Stride, the founder and CEO of VC firm Stride. He said that although advice varies between start-ups, he generally encourages entrepreneurs in his portfolio cut down on costs.

Destin stated that lower expected demand, slower funding markets and less action are what really require attention. He has made investments in European unicorns, such as Deliveroo, Zoopla, and Cazoo car-retailer.

Klarna is a Swedish fintech company that was at the top of Europe last June. $46 billionIt was officially announced by last week. planning to lay offIt employs approximately 10% of its total workforce worldwide.

It employs about 6,500 people in the global buy-now/pay-later business. reportedly lookingTo raise additional money for a substantially lower valuation around $30 billion

The fundraising industry is full of paradoxes. Pitchbook data shows that VCs are more financially savvy than ever and yet, they have a tendency to reduce their investment in order to watch the economy develop.

Oscar White, founder and CEO of Beyonk’s travel technology platform, said to CNBC that founders who raised capital at high valuations in the Covid pandemic are likely to run out of money within the next year.

White stated that “they are likely to have to raise for a downround if there is a recession.” He also said that guidance was available. Portfolio companies of many VCs should focus on capital efficiency growth. They also aim to achieve runway by 2024.

White expressed optimism that we would continue to fund and invest growth, noting that investing will never stop.

Technology stocks cratering through the first five months of 2022 and the Nasdaq stock market on pace for its second-worst quarter since the 2008 financial crisis, start-up investors are telling their portfolios that they aren’t immune to the fallout.

Y Combinator is a start-up incubator that helped create AirbnbStripe said that last week, companies must “understand the negative impact that poor performance in public markets of tech companies has on VC investment.”

Sequoia Capital, the legendary venture firm, said that it would take longer to recover. However, they can give advice on how to get there. Google, Apple and WhatsApp, wrote last month in a 52-page presentation titled “Adapting to Endure,” a copy of which CNBC obtained.

Hussein Kanji (a Hoxton Ventures partner) told CNBC European start-ups have just begun to hear the message.

He said, “I believe people got the memo only in Europe last week” or “the week before”.

The rapid growth of grocery delivery is also evident elsewhere in Europe. coming to a grinding halt. Two of the biggest instant food apps in the world, Getir, and Gorillas announced last week that they would be laying off hundreds of workers. Zapp also announced that it will be making redundancies within its U.K. staff.