Startup Layoff & Hiring Trends
Even during good times, startups are accustomed to overcoming massive hurdles. Enjoying a good fight is an integral part of the DNA of a startup. But how are they handling the fight we are facing now? Like many companies out there, it goes without staying that startups were going to get hit hard. The pandemic has caused approximately 63,794 layoffs across 493 startups that we reviewed since March 11th.
According to a new report by Startup Genome, global venture capital funding has fallen by 20% – that’s a big hit to cash flow. Many startups are in trouble as their runways are getting shorter due to lack of liquidity, funding options and revenue declines.
In this infographic, we are reporting on the impact of the crisis in terms of layoffs and hiring trends. There is definitely some light at the end of the tunnel as we are seeing signs that key indicators are starting to improve. And there are certainly encouraging numbers of startups that are hiring and growing. Make sure to take a look at the 14 startups we showcased from Gazelle.ai that are hiring and projected for solid growth.
The Big Picture
Thanks to sources like Layoff.fyi that tracks tech startup layoffs since the coronavirus was declared a pandemic, we are able to gather even more data on the impact this crisis is having on the startup community. Some key findings include:
The top five startup industries hit the hardest in terms of layoffs:
The top five startup industries least impacted by layoffs:
Most layoffs by company:
- Stitch Fix
What else do we know?
- Uber laid off 6,700 people (25% of total staff) and closed a total of 45 offices around the world. Groupon laid off 2,800 people (44% of total staff), and Airbnb laid off 1,900 people (25% of total staff) and is predicting a $2.4B drop in revenue
- The job roles that are most at risk are Sales at 29.9%, with Customer Success at 21.7% and engineering at 13.7%
- The job roles that have been least affected are Operations at 12.3%, Marketing at 6.9%, and Product/Design at 4.6%
- On the international front (excluding companies from the United States), the top five companies with the most layoffs are:
- Agoda (Singapore), laid off 1,500 people – 25% of staff
- Ola (Switzerland), laid off 1,400 people – 35% of staff
- Stone (Brazil), laid off 1,300 – 20% of staff
- Swiggy (India), laid off 1,100 people – 14% of staff
- CureFit (India), laid off 800 people – 16% of staff
However, we may be seeing a turn for the better. The number of new employees laid off in the last month has declined to its lowest level since the start of the crisis.
What’s happened to Global Funding?
There are many factors that determine the success of a startup. Depending on their revenue model, funding is one of the key ways entrepreneurs achieve their goals. Finding funding during Covid-19 will be tough and the competition to get that funding has gotten even tougher.
To get a better picture of the impact the pandemic has had on global funding, Startup Genome, recently released an extensive report on the subject. Here are the major highlights:
- Global venture capital funding has dropped by 20% since the onset of the coronavirus crisis in December, 2019.
- China, the first country hit by the coronavirus crisis, had a drop of over 50% in funding relative to the rest of the world in January and February. Nonetheless, China has seen a rebound in March, although with numbers still lower than pre-crisis levels.
- Asian ecosystems (excluding China) also saw a major drop beginning in January, with no rebound as of March.
- The United States has experienced only relatively small changes in startup funding since December: a drop of less than 10% by March.
- European ecosystems only saw drops in funding activity as of March, representing about 10% compared to December, 2019.
Startups Hiring & Growing Fast
Based on research Gazelle.ai, here at the top 14 companies that are slated for fast growth and are currently hiring despite all the layoffs. The full list of companies that are hiring along with their g-scores (Growth Score) can be found directly in the platform.
- Outreach is a sales engagement platform that accelerates revenue growth by optimizing every interaction throughout the customer lifecycle.
- Cloudflare is a web performance and security company that provides online services to protect and accelerate websites online.
- Alarm.com is the leading platform for the intelligently connected property that provides cloud-based services for remote control, home automation, and monitoring services.
- Fair is a car leasing company that aims to grant access to mobility to everyone by pioneering the car-as-a-service (CaaS) concept.
- VillageMD collaborates with primary care physicians to maximize success in a changing health care environment.
- BitMEX is a P2P crypto-products trading platform.
- Homeday provides a platform for data-driven pairing in the real estate industry.
- Monito is a comparison website for international money transfer services.
- WEconnect Health’s suite of healthcare technology keeps members connected to their care team and highly engaged to their recovery plan by leveraging the most effective standalone treatment technique for Substance Use Disorder
- Relive developed a mobile app for creating 3D animated video stories.
- Grand Centrix offers support and services to build digital productions, including IoT platforms, smart home solutions, and digital business models.
- Pyramid Analytics provides business intelligence software that delivers data-driven insights for organizations with advanced analytics and data visualizations.
- Razorpay is the only payment solution in India that allows businesses to accept, process and disburse payments with its product suite.
- ApplyBoard is a SaaS-enabled marketplace uniquely designed for international students to apply to study at the best institutions of higher education globally.
There is no doubt that the startup sector has been and will continue to be shaken-up for some time to come. But we do know they survived the crash of 1987, the dot-com bubble burst of 2000-2001 and the 2008-09 financial crisis. We have also seen firsthand how important technology has been during the crisis. The big tech giants are going strong. Amazon has added 175,00 jobs to handle its growth. Facebook and Apple have yet to cut any jobs. And we have seen many tech sectors booming such as telemedicine, fintech, and work-from-home tools.
Startups go hand-in-hand with innovation and job creation. These two factors alone are way too important to see startup growth and funding suffer for very long. We are seeing the startup community come together in support of each other and governments helping to stimulate this important ecosystem. In the hopeful words of Ron Conway, Investor, SV Angel, “Any time is a good time to start a company.”