Headcount across US startups is in a deep freeze.
The data (from across more than 45,000 US startups that use Carta) is startling.
We looked at net headcount change over time across the entire company population. So for each month we took total new hires then subtracted the total number of departures (includes both departures by choice and through layoff, firing, etc).
𝗧𝗵𝗲 𝗗𝗮𝘁𝗮 𝗦𝗮𝘆𝘀
Since the start of 2023, startups on Carta have only added 31,000 net headcount to their payrolls.
From 2019 through 2022, startups on Carta added 865,000 net headcount!
From 2019—2022, we saw only 2 months where net headcount declined.
We've seen 12 such months since the start of 2023
𝗪𝗵𝗮𝘁'𝘀 𝗛𝗮𝗽𝗽𝗲𝗻𝗶𝗻𝗴
Obviously interest rates changed in 2022, startup funding dried up, layoffs increased. That explains the initial drop in net headcount.
2023 and most of 2024 were about belt tightening. More layoffs, yes, but also an increased focus on capital discipline, headcount management, and the new favorite metric of ARR per employee. Do more with less was the mantra.
Mid-2024 through today...is this the impact of AI? Are startups trying to automate roles they would have previously hired for? I think yes.
Startups are smaller at each stage than they have been in 6-7 years. The average Series A startup raising in 2025 had just 14 full-time employees (down from 22 in 2022).
Good for companies building sustainable businesses. Bad for candidates trying to get in to those companies.
Is there a plateau ahead or will these declines simply march onwards toward the Altman Horizon (1 employee, $1 billion in valuation)?
Tricky times out there.
#startups #startuphiring #startupjobs #founders
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