While French Tech startups had previously demonstrated a strong capacity for resilience, the sector’s job creation dynamic took a noticeable turn for the worse in April,with the number of startups creating jobs plummeting (-69%), while the number of those laying off jobs rose (+50%). After three consecutive months of net job creation, French startups shed over 3,600 jobs in April, bringing the total to around 274,000.
The trend is widespread across all sectors and regions. In fact, all regions of mainland France are affected, including the dynamic Île-de-France and Auvergne-Rhône-Alpes regions.Île-de-France alone accounts for more than 60% of the jobs lost in April.This deterioration is also found in all the sectors analyzed, including GreenTech, a constant leader for almost 18 months.
Nationally, the 2023 balance remains positive, with net job creation of almost 5,000 since the start of the year. On the other hand, it is difficult to anticipate how the job market will evolve over the coming months, as last December’s deterioration (-800 jobs) was followed by three consecutive months of net job creation. In fact, several explanatory factors come into play, and sometimes conflict with each other:
Possible factors behind job cuts:
- The slowdown in startup financing since the second half of 2022;
- Any instructions from investment funds, which now prioritize profitability over the growth of their holdings;
- Pressure on prices from certain major clients, who prevent startups from passing on rising salaries and operating costs (accommodation, electricity, etc.).
A factor that should sustain the sector’s momentum:
- Demand is holding up well, withGDP up 0.2% in the first quarter, driven in particular by dynamic investment in information and communications (+1.5% after +1.1%) – IT, telecoms and audiovisual – and by exports(NB: software publishers account for almost 60% of sales).
Are we witnessing the beginnings of a French catch-up phenomenon in relation to a tension also observed on foreign markets, with a time lag notably linked to French labor law?
Let’s remain cautious and check in early June on barometrestartups.fr to see whether these trends will be confirmed for May.
