Startup hiring cut in half

Founders got much more strict on new hires in 2023.

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Combine this newfound scrutiny on headcount with a record year of layoffs and the asset class as a whole shrunk in the previous 12 months.

This is a major reversal from the boom period in 2021 and 2022, both years that saw Carta companies collectively hire more than half a million new employees.

This past year, only 268K hires joined Carta startups while 286K left them (either by choice or through a reduction-in-force). We can only track employees who receive equity, but that is closer and closer to all employees for tech startups these days.

So…what happened? Two ideas:

Founders took investor calls to cut costs seriously - and payroll is everyone's largest cost center.

Employees read the room and chose to remain in the current jobs more frequently, lessening the need to hire backfills.

Open question as to how 2024 will shake out, though it began on a sour note with layoffs ticking upwards in January. It's possible that 2022 will remain the high point of startup hiring for many years yet.

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Peter Walker

Carta Insights