Startups Are Hiring Fewer Workers and Paying Out Less in Equity

Startups Are Hiring Fewer Workers and Paying Out Less in Equity

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According to a new report from Carta, startups are hiring fewer workers and paying out less in equity compensation. The report, which analyzed data from over 10,000 startups, found that the number of new hires at startups fell by 20% in the fourth quarter of 2023. The report also found that the median amount of equity compensation paid to new hires fell by 15% in the same period.

The slowdown in hiring and equity compensation is likely due to many factors, including the rising cost of capital, the ongoing war in Ukraine, and the threat of a recession. As a result, startups are becoming more cautious about their spending and are looking to conserve cash.

The slowdown in hiring and equity compensation is a significant change from the previous year, when startups were flush with cash and were hiring aggressively. In 2022, the number of new hires at startups grew by 50%, and the median amount of equity compensation paid to new hires increased by 25%.

The change in the startup landscape is likely to have a number of implications for the tech industry. First, it will make it more difficult for startups to attract and retain top talent. Second, it will put pressure on startups to become more profitable. Third, it could lead to a wave of consolidation in the startup industry, as smaller startups are forced to merge or shut down.


Here are some additional details from the report:

  • The number of new hires at startups fell by 20% in the fourth quarter of 2023.
  • The median amount of equity compensation paid to new hires fell by 15% in the same period.
  • The slowdown in hiring and equity compensation is likely due to a number of factors, including the rising cost of capital, the ongoing war in Ukraine, and the threat of a recession.

Here are some thoughts on the implications of the report:

  • The slowdown in hiring and equity compensation is a significant change from the previous year, when startups were flush with cash and were hiring aggressively.
  • The change in the startup landscape is likely to have several implications for the tech industry.
  • First, it will make it more difficult for startups to attract and retain top talent.
  • Second, it will put pressure on startups to become more profitable.
  • Third, it could lead to a wave of consolidation in the startup industry, as smaller startups are forced to merge or shut down.