Mostly research: Following the headcount cookie crumbs (June 2023 report)

The most important decisions a company makes are related to headcount.

There’s a famous saying in the tech world that:

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“You either build the product, sell the product, or help the people doing the first two things do them better.”

In fact, +70% of all dollars spent at SaaS companies are on headcount. Therefore, hiring is a leading indicator of future topline growth (or contraction).

In other words, headcount tells you where the puck is going.

And even better, if you can track headcount patterns at the departmental level you can detect more nuanced signals about a company’s future revenue (and ambitions).

Generally speaking:

Increasing Go to Market headcount (Sales, Biz Dev, CS, Marketing) is a bullish signal on topline forecasts and a validation of management’s confidence
Increasing R&D headcount (Product, Engineering) indicates a company is investing ahead of it’s technical roadmap, and potentially moving into new areas
Increasing IT headcount may indicate a company is undergoing a digital transformation, and could be a big software buyer in the coming months

Here at Mostly metrics we track the headcount patterns of 334 technology companies on a monthly basis. 105 are currently publicly listed and 229 are currently privately held.

More specifically, we tag companies across the following characteristics:

Public vs Private
Sector (e.g., security, development, finance, HR etc.)
Business model (e.g., field sales, PLG, channel)
Pre IPO candidates
Vertical software
Take private
PE owned

In short, there’s a lot of money to be made if you can spot patterns ahead of time - whether that be as an investor, a seller of technology, a CFO benchmarking their own company’s staffing model, or an employee looking to land their dream job.

In this post we’ll cover the top signals coming out of our June 2023 headcount data.

TL;DR: What you’ll find in this report:

OpenAI grew headcount 11% month-over-month
Ramp and Navan, spend mgmt platforms, add HC as CFOs pay for visibility
Only 16 out of the 105 publicly traded companies we track grew GTM HC m/m
Gitlab and Github hit the breaks on hiring
Xero strives for profitability with their new CEO, making deep cuts
Datadog and two other category leaders are hiring lots of PMs and Engineers
A surprise publicly traded payroll player is scaling quota capacity rapidly
Fortinet has over 200 IT roles open?!
Among pre IPO companies, DataBricks can’t hire sales people fast enough
Two recent take privates cut headcount to streamline operations