Are startup layoffs "good" or "bad" right now?
Trick question! Both, of course.
Chart above shows the number of employees at companies on Carta who left by month. We split the reason for leaving into two: voluntary departures in black, layoffs / firings in salmon orange.
Now on the one hand, layoffs have been trending down pretty steadily from their all-time peak in January 2023. But they can't seem to get back to the pre-pandemic levels of 2019.
The other uneasy factor here is the ratio between layoffs and voluntary departures. When that ratio is closer to 1, the salience of layoffs remains high for many startup workers. Higher salience → less external push to leave your current gig → less backfilling…and now startup hiring is impacted as well.
So we're in a better place, no doubt. But I wouldn't yet call it good.
Onwards.
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Peter Walker
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