Ask HN: How has the current economic situation affected your startup?

Has the economic downturn had significant effects on your startup? If so, what kind and how are you dealing with them? I wasn't sure what effects we would feel at the startup where I work (a "high tech" startup with physical products), as we already had a number of long-term contracts. Our company is self-funded/bootstrapping and apparently has been getting loans to cover payroll. This is where we've been hit, as we can no longer secure those same loans, according to the founder. Needless to say, that's led to major work hours reductions for some and some layoffs (the chief engineer was the most expensive employee...). They've put a lot of employees in a difficult position,which is that they don't think they can pay them (non-core employees) until the next product ships. The problem is, of course, do you work now, hoping to be reimbursed (assuming the company will still be around), or go looking elsewhere... Edit: What struck me was that this wasn't really a primary problem of our business (or at least our core technologies), but that we ended up getting hit by the wider credit problems anyway. Any other stories?