Is AI taking startup jobs? What we know for sure and what we can guess.
7 years of context:
Data below shows new hires by startups on Carta. All included employees received equity.
Hiring briefly dipped to ~20,000 per month as the pandemic sent anxiety through the whole global economy.
Hiring explodes in late 2020 and through 2021 as ZIRP (zero-interest rate phenomenon) creates a digital company frenzy.
Interest rates change in early 2022 and with that funding for startups declines. As funding recedes, so does hiring.
Nov 2022 = ChatGPT arrives. No impact on jobs yet.
In 2024, funding for startups perked up a little but hiring did not. Founders had internalized the ideas around capital efficiency and the buzzy AI companies were trying to get as far as they could with the team they already had.
January 2025 = fewest hires in January by Carta startups in the last 7 years.
Look, funding is still a challenge for many companies. Taking better care of investor dollars is possible without augmenting with AI.
But I think it's getting harder and harder to claim that AI is having no effect on the job market in startups. Companies are focused relentlessly on ARR per FTE (that is total revenue per full time employee).
If your team of 5 engineers can accomplish the work of 15 engineers from 2019 using AI tools...why hire that 6th teammate?
Caveat: this is only tracking equity-holding employees. So companies could instead be hiring offshore teams or fractional employees at much higher rates than before (and I do think that's part of the picture).
But overall, ya. AI is taking startup jobs in my view.
Strange times!
#startups #founders #startuphiring #startupjobs #AI
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