We’ve all seen the big headlines and the social media feeds filled with news of massive layoffs across private tech companies. According to Layoffs.fyi – a website that has been tracking redundancies at startups since the start of Covid – there have been over 50K layoffs across 339 VC-backed companies as of July 14 this year.
Meanwhile, public tech giants such as Microsoft, Netflix, and Facebook have not been immune to current market dynamics – as one by one they announced layoffs and hiring freezes.
After years of favourable market conditions, widening talent pools as remote work became mainstream, followed by the great resignation and the war for talent, the tech job market has been dramatically impacted in 2022.
In our latest research published today, we wanted to take a bird’s eye view of the current state of play for startup jobs globally. While layoffs, slashed valuations, and declining venture capital funding has dominated conversations, we wanted to understand how advertised job vacancies have been impacted within VC-backed startups across a range of stages, business models, and geographies as companies race to extend runways.
About the data
Before we dive into the key take-aways, let us explain our methodology:
Our analysis is based on data from NGP Capital AI Platform Q whereby the dataset consists of high-momentum technology startups active in the markets NGP Capital invests in.
The parameters were:
- 11, 711 unique companies
- 275,528 unique job openings
- Job openings are collected from 9th January 2022 to 19th 2022
Moreover, the companies we looked at are all privately owned and VC-backed, founded in the last 10 years, and HQ’ed in either Europe, North America, or Israel.
- Open job positions declined by 40% since February 2022.
- Roles within B2C companies are down by nearly 60%, compared to 40% within B2B.
- While all roles have been impacted, sales roles have been particularly hit.
- Series A and Series B stage startups are among the worst affected.
- Overall, open positions in Europe are down 43%, whereas in North America the decrease is 39%.
But amid the slowdown, opportunities exist
The data shows startup recruitment has slowed down dramatically – even more than we had anticipated prior to starting the analysis. It’s clear that VC-backed companies are in a race toward extending their runway amid the fear of a global recession and conservative investor activities.
That said, it’s also important to note that this report covers the first 6 -months of 2022, and with September to December generally known as the peak recruitment period; the latter half of 2022 will be pivotal. Furthermore, while there has been a decline in venture capital funding, Venture capital dry powder has grown by $43.1bn in Q1 2022 to $478.5bn.
As Bo Ilsoe, NGP’s Managing Partner says: “Previous downturns have been key drivers behind some of the World’s most successful businesses. Adversity often breeds innovation. The current situation will offer many opportunities for well-positioned companies to grow and to acquire less successful competitors.”.
Ultimately, while the period of hypergrowth and high valuations seems to have cooled off – at least for now – for startups with enough operating capital, the current market presents the opportunity to hire top talent from any region and outperform competitors.