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 July 2023 headcount data.

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

  • OpenAI grew HC 33% m/m (accelerating from 11% in the prior month)

  • This month 210 of the 338 companies we track increased HC from June to July

  • This represents a significant increase from the 131 who increased HC from May to June, perhaps signaling we’ve made it out of the woods

  • Amongst pre-IPO companies, Ramp continues to hire, while Navan levels off after a period of hyper HC growth, falling out of the top 10 in our data set

  • Walkme walks headcount back by 6%

  • New Relic cuts staff before anticipated take private with Francisco Partners, TPG

  • Xero strives for profitability, decreasing headcount for the second straight month

  • Dropbox, C3.ai, DataDog, and Cloudflare recruit R&D talent for AI roadmaps

  • A surprise publicly traded cyber security player is rapidly scaling quota capacity

  • 15 public companies have >50 IT roles open teasing digital transformation

  • Among pre IPO companies, Grammary, Deel, and…. Expensify??? are all scaling GTM headcount (for different reasons)

And more…

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