It’s 2023, where we ask Term Sheet readers—a slew of VCs, founders, private equity investors, and bankers—to look into their Crystal Ball and tell us what to expect in the year ahead.
For this year’s issue, we dug through more than 100 predictions, ranging from quick takes on whether venture capitalists would run for office to thoughtful analysis on whether philosophy majors will be at the top of the hire list in an artificial intelligence-powered world. And of course, speculation as to how many unicorns may lose their status, and intel as to which sectors are most poised for M&A deals. What about for hiring? And what about layoffs? Here is what readers said 2023 would have in store, in your words:
(Note: Some answers have been shortened for clarity and/or brevity)
“The 2022 norm has been to trim (10-20% of workforce), while the norm in 2023 will be to cleave (50%+ of workforce). Things will get worse before they get better.” —Mark Goldberg, partner, Index Ventures
“With a greater microscope on keeping burn low, certain teams that were well-staffed will now be replaced with AI-driven insights and actions. There will also be a much higher demand for linguists, psychologists and ethicists than ever before as many of the engineers will work side by side with them. Perhaps there will be a new type of CEO – Chief Ethics Officer.” —Aditi Maliwal, partner, Upfront Ventures
“A groundswell of companies will order their employees back to the office at least 3 days a week as the realization sets in that laissez faire ‘hybrid’ is not working for most companies. Given the soft job market, most employees will comply…and realize that going into the office is not so bad after all.” —Brian Ascher, partner, Venrock
“Many of the highest profile companies that raised in 2021 at inflated revenue multiples are now working to grow into their valuation as multiples have compressed significantly. However, many of the employees and executives who joined these companies received options that are now very far out-of-the-money. The market for top talent is still tight, and I would expect to see significant executive movement as year-end bonuses are paid (or not) in Q1. This will create a very positive recruiting environment for early stage, right-sized companies on rapid growth curves.” —Graham Brooks, partner, .406 Ventures
“Tech layoffs will continue through the first half of 2023. Software companies will make up the bulk of these, but IT services won’t be immune.” —Chris Barbin, CEO and founder, Tercera
You can read all of this year’s Crystal Ball predictions in Term Sheet here.
