The startup job market is not healthy - and it's not just layoffs.
Obviously the layoffs that have rolled through the US tech ecosystem have been damaging over the past 18 months. Private tech startups have suffered right alongside the major tech giants like Meta, Google, and others.
Bright spot - we have seen layoffs in startups drift downwards from their peak in January of this year.
Across all US Carta companies, about 18,000 employees lost their jobs in January. That number was just over 8,000 in October - a significant improvement.
However, the number of employees leaving their jobs voluntarily has basically followed the same pattern.
The chart shows the ratio between these two types of employee departures over time. Black line = voluntarily departures, orange line = involuntary.
In a normal market, we'd expect about 80% of the total employee departures to be initiated by the employee. In today's market, only about 54% have been.
Couple reasons why this is an issue:
Employees choosing to remain in role (in aggregate) is a signal that they remain worried about the overall job market. The tolerance for risk (jumping to a new gig) is low.
Employees have also seen that in these layoff waves, new hires are often the first to get cut. This contributes to the overall feeling of uneasiness.
If employees remain in seat for longer, there is less need to backfill from their current companies, reducing the number of open positions and adding some kludge to the hiring market.
Now maybe this all turns around in Q1 2024. I'm cautiously optimistic that next year will be a better time to join a startup. But it's possible that we have entered a new phase in the startup talent market that last quite awhile.
Personally I think having more talent exposed to startups is a good thing - these folks could hit it big with a unicorn, gain valuable operating experience, and may be more likely to become founders themselves in the future.
Hoping that path widens again next year.
#cartadata #startupjobs #jobmarket #startups #hiring #layoffs
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