According to a Startup Genome survey of 45 countries, nearly three-quarters of startups have laid off full-time employees due to the COVID-19 crisis
John Koetsier / Forbes :
Context & Ripple Effects
Startup Genome's survey across 45 countries turns scattered layoff reports into a global baseline: nearly three-quarters of startups have cut full-time staff. It lands on top of tracking that found 204 startups had already laid off 16,229 employees by mid-April, a count that was nearly doubling week over week.
The mechanism behind the cuts is visible in the same research: Startup Genome finds global venture funding fell 20% since December 2019, with the drop sharper in China. Regional surveys fill in the texture — 49% of surveyed UK startups froze hiring and 30% cut salaries — so the Forbes figure reads less like an outlier and more like the aggregate of what trackers were already counting.
First-order effects
- Startup employees worldwide are directly affected: with roughly three-quarters of surveyed firms cutting full-time roles, the layoffs tracked piecemeal since March are confirmed as an industry-wide default rather than isolated distress.
- Founders gain a defensive playbook validated by peers — cutting full-time headcount to extend runway while venture funding is down 20%, rather than pausing at hiring freezes or salary cuts.
Second-order effects
- With fewer startups hiring, the labor market for experienced startup talent loosens sharply, pressuring later-stage companies and acquirers who compete for the same engineers and operators.
- Investors face a portfolio-wide triage problem: a 20% funding decline means bridge rounds and follow-ons get rationed, pushing marginal startups toward the layoffs, halted IPOs, and shutdowns already documented in US coverage.
Third-order effects
- If the pattern holds, the post-2020 startup cohort gets built on leaner full-time teams and heavier reliance on contractors and automation, resetting expectations for what a funded team looks like.
- Capital consolidates toward proven performers during downturns, reinforcing the concentration of venture dollars in fewer, larger checks — a dynamic India's later funding crunch would echo.
The trend: The pandemic marked a structural reset in startup staffing, where layoffs became the standard response to contracting venture funding rather than a signal of individual failure.