Which startup industries are still growing headcount?
As of Q3 2023 - only Energy, Hardware, Medical Devices, and Biotech. These make up much of whatever investors are calling "deeptech" these days (basically sectors where the primary risk involved is technical).
Let me explain a little about the chart below.
Each quarter, we measured how many new hires Carta companies in a given industry made vs total employee departures. Those departures include both layoffs and voluntary leaves.
A quarter with "1.0" means that hires and departures were effectively equal in that time period and the startups in that industry kept headcount flat.
You can see some absolutely bonkers growth quarters in early 2021. Biotech was adding 5.5 hires for every employee departure. Healthtech was at 4.1, Fintech at 4.6...heady times.
But that's no longer the case. In many industries (including SaaS, which is the biggest category under our current classifications), hiring failed to keep pace with departures in recent quarters.
Q3 is the most recent complete quarter for which we have data - but we'll release more Q4 data in our upcoming State of Startup Compensation report, due out next week! Subscribe at the link in graphic to get a copy in your inbox.
𝗢𝘁𝗵𝗲𝗿 𝗞𝗲𝘆 𝗣𝗼𝗶𝗻𝘁𝘀
Edtech and Gaming are currently faring the worst in headcount growth, with only 0.7 new hires for every departure.
Interesting to see most industries have their peak growth quarter in Q1 2021 - this is likely due to a combination of seasonality (Jan is always the biggest hiring month) and exuberance.
The deeptech fields (and Healthtech) are the only 4 sectors in which net headcount has never shrunk since 2019. More evidence of a deeptech revival in venture capital.
Obviously, headcount isn't everything. Many folks are talking about the benefits of founders focused on growing their companies with fewer employees per unit of revenue. For each individual company, this is great! But it does mean fewer people working in startups overall.
Analysis here only includes employees receiving equity. This covers the vast majority of startup talent, but not quite everyone.
If you have questions you think our data on startup employment and compensation can answer, I'm all ears. Ask now and I may be able to include it in the report next week!
#cartadata #startups #headcount #hiring #deeptech
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