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2022 has been rightly called the year of hiring freezes and layoffs as a considerable majority of big public and private firms, including Meta, Amazon, Twitter, Alibaba, Microsoft, Ford and others laid off huge percentages of their employees, creating greater than 90k job cuts in the market.
To explore the 2022 hiring trends across private technology companies in the United States & Canada, Synaptic and LinkUp collaborated to study job trends classified by funding stages, employee strength and job roles. Interestingly, all stages of companies showed an average of 45.4% decline in job openings post receiving funding in 2022. This insight runs opposite to the common perception that companies tend to increase their workforce post funding.
2022 had companies struggle with inflation, economic slowdown and rising potential recession increasing through the year. These factors largely influenced the hiring patterns, and organizations began implementing cost controlling measures, digital initiatives and restructuring teams.
As a result, even though funding came in, companies became wary of the declining market sentiment and decided to keep money in the bank as compared to spending it on acquiring new talent. This finding is backed by the Synaptic-LinkUp research highlighting the key alternative data points which clearly indicate a decline in job openings.
Image: Graph showing decline in the number of job openings in US-based private tech companies across funding stages.
Many US-based companies, such as Cox Communications, Toptal, General Atomics along with other early stage companies saw an aggregate of 47.3% decline in job openings. Companies publicly reasoned their move to operate “as efficiently as possible” and restrategized investments. On the other hand, many companies such as Dgraph, Viam, Magic (magic.link), Doppler, Slingshot Aerospace and others appeared as clear outliers by upsizing beyond a hundred percent.
Early-growth stage companies headquartered in the United States such as Instacart, Varsity Tutors, ResCare, iMerit, Zumba Fitness along with other early-growth stage companies saw an aggregate of 45.9% decline in the active job count. Outliers in the early-growth stage category include companies such as Notion, Databook, Alchemy (alchemy.com), Wisetack, Mutiny (mutinyhq.com) and many others that didn’t downsize and continued to aggressively hire.
Growth stage companies such as Stripe, Databricks headquartered in the United States, along with other early-growth stage companies saw an aggregate of 43.2% decline in the active job count. Silicon Valley payments giant Stripe announced that it has let go of 14% of its staff. Citing global economic challenges including inflation, higher interest rates and “sparse startup funding,” cofounder and CEO Patrick Collison said in an email to employees that Stripe needs to cut costs. At the same time, growth-stage companies such as Whatnot, Fireblocks, Gravie, Postman, RapidAPI, Rippling and others exhibited positive growth in their employee count.
Layoffs and decline in job openings are mostly assumed to signal that companies are facing difficulties, which damages investor’s confidence in their stock prices. However, in a volatile economy, companies could be consciously safekeeping manyfold operating costs to stay prepared for the future.
Investors understand that a company's long-term performance can be gauged by a lot of factors including geopolitical movements, employee force, and consumer behavior among others. A lot of this data isn’t traditionally available, but guiding signs can be traced within alternative data sets.
To get a complete picture of the market scenario, investors are increasingly data-driving their decisions with alternative data insights such as firmographics, similar companies, industry classification, people, employees, investors, website and app visits, financials, funding, tech activity & mentions among others before zeroing in on major portfolio changes. Click here to learn more about alternative data platform.