Startups are doing more with less (hiring)
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Illustration: Eniola Odetunde/Axios
Big Tech companies have been slashing headcounts over the past couple of years — and startups are also stretching their venture dollars by hiring less, according to data from Carta.
Why it matters: Stockpiling software engineers was a phenomenon of the zero-interest rate era — for big and small companies alike.
The big picture: At the same time, median early-stage deal size has grown, according to PitchBook data, further supporting the idea that companies are doing more with less.
By the numbers:
- Startups that raised seed funding in the first half of 2024 had an average of 5.3 employees, down from 6.9 three years ago.
- Startups that raised a Series A round in the first half of the year had an average of 15.6 employees, down from 17.6 in the first half of 2021. Series C startups followed a similar pattern.
- The outlier was Series B startups, which have slightly bigger teams on average than they did three years ago.
Zoom out: While January of this year stayed on trend as a big hiring month, the 27,677 new hires is 29% less than the previous January.
- Carta also notes it saw the fewest new January hires so far this decade.
Bonus data: Startups also seem to be pulling back from an earlier pivot toward more geographically distributed teams.
- In-state hiring at startups valued between $1 million and $10 million dropped from 67% in 2019 to 45% in 2023. However, that's started to tick back up, according to Carta.
- Same trend with those valued between $10 million and $50 million and the larger ones above $500 million.
- The startups in the middle ground, however, continued to hire more out of state this year.
The bottom line: This shouldn't be surprising given the venture market's continued tightness, and relative uncertainty about what lies ahead. Companies want to make their resources last for as long as possible.
