For almost a decade, you could do a back-of-the-napkin forecast of a software company’s growth by answering one question: How fast are they hiring sales reps? If headcount was ripping, revenue was right behind it. If hiring froze, growth was about to get choppy.

Lately, that rule of thumb has been breaking down.

What we’re seeing

Across companies that sell software and related services, sales rep headcount was growing at a very consistent clip for years, from the mid-2010s through 2022 (see Figure 1). Then the trend snapped, down to 2% or less, even negative 1% between June 2023 and June 2025. In other words, sales hiring didn’t just slow down. It went from high-growth engine to barely moving. You might be thinking: “Wait, what about all the hiring at the high-flying AI start-ups?” Fair point—but their sales hiring isn’t yet at a big enough scale to offset the deceleration we’re seeing across the rest of the software market.

Figure 1

Two interesting observations jump out—and they help explain why this slowdown has been so stubborn. First, the boom-and-bust is most extreme in inside sales. Inside reps were growing roughly 20% to 25% year on year through 2022, then flipped to negative 3% to negative 7% from 2023 to 2025. Field sales cooled too, but far less violently: roughly 4% to 6% year on year through 2022, then drifting into low single digits and low negative single digits through 2025. That’s not shocking: For the last decade, software has been steadily shifting its mix from field to inside coverage—especially for small and medium businesses (SMBs)—and when the market tightens, inside capacity is the easiest lever to pull back quickly.

Second, the biggest swing shows up in mid-market companies (500 to 5,000 employees), which were investing in sales headcount at a higher rate than SMBs and enterprise peers through 2022—and then retrenched, hiring at a lower rate from 2023 to 2025. Again, not that surprising: Mid-market is where companies hit “escape velocity”— they find product-market fit and go full throttle. This momentum works both ways: When demand softens or quota math breaks, they’re the first to feel it.

How we got here

From 2015 to 2020, software growth was a land grab. CIO budgets were expanding, cloud categories were forming, and the playbook was clear: Hire reps as fast as you can, feed them inbound and sales rep–generated leads, and let capacity do the work.

Then Covid happened—and spending didn’t slow. If anything, it accelerated.

During the first 18 to 24 months of the Covid-19 pandemic, companies pulled forward software spending at unprecedented rates to support work from home. Many teams doubled down: more reps, more quota, more coverage.

But as we moved from 2022 into 2023, budgets tightened quickly, and scrutiny returned. In response to stalled demand, software companies pulled the handbrake hard. During this period, it felt like there were announcements every couple of days about companies cutting costs to align with market demand.

At the same time, another reality set in: After years of selling new products, a lot of customers still hadn’t fully implemented what they bought. Adoption gaps widened, churn pressure rose, and many companies chose to redirect dollars from new sales to implementation specialists, customer success, and value delivery. (It’s hard to sell expansion when the first deployment never landed.)

Why we don’t think the sales hiring boom is coming back

Our view: The next three to five years in software will be defined less by the old playbook of “how many reps can you add?” and more by “how much value can your product create—quickly, visibly, and repeatedly?” To be clear, we believe sales rep headcount growth will increase compared with current levels, but it won’t hit the manic hiring state of the 2015 to 2022 period. A few forces are driving this:

• Product is doing more of the selling. As pressure on gross and net revenue retention (GRR and NRR) continues, it’s clear that it’s getting harder to land the next incremental sale. Just adding more sales reps won’t fix the problem. The exception is companies with a clear product-market fit; they’re seeing strong retention and growth. So, if you have the product, adding sales reps makes sense. But for everyone else, adding sellers just makes the math uglier. (Note: If you want to learn more about these trends, check out our recent Substack post on CIO spending trends.)
• The market is chasing productivity, not headcount. Over the next two to five years, teams are going to invest in AI-enabled workflows that should make an average seller meaningfully more productive. If a rep can cover 1.2 to 1.7 times the book of business with better tools, companies won’t need to scale sales headcount the way they used to. This should put a damper on overall headcount growth.
• Buying journeys are becoming more self-directed. More prospects are shortlisting vendors before they ever talk to a person—and they increasingly expect a high-quality digital evaluation experience (content, community, trials, transparent packaging). In that world, inside sales is the first place companies look to do more with less. (Read our post on our latest B2B CMO forum to learn more about how buyer journeys are evolving.)

Net: Sales reps aren’t disappearing, but they are losing their monopoly on growth. The growth advantage is shifting to companies that combine great product with a modern, efficient go-to-market engine.

What software leaders should do now

If you buy this forecast, the implications are practical:

• Decide what you’re building for. If you have breakout product-market fit, invest with conviction—but aim those dollars at repeatable product value and time-to-value, not just more capacity. If product-market fit is still forming, treat sales hiring as a lagging indicator—not a leading one.
• Build your seller productivity stack. AI shouldn’t just summarize calls. It should reshape the end-to-end workflow: account research, personalization, qualification, pipeline hygiene, proposal creation, pricing/packaging guidance, and renewal/expansion plays. And don’t forget marketing: AI can raise the ceiling on top-of-funnel and content velocity just as much as it can improve conversion.
• Rebalance the organization around value delivery. The fastest path to durable growth right now is fewer broken handoffs. Tighten the loop from sale to onboarding to adoption to renewal. Many teams will win by shifting marginal dollars from inside sales scale to solutions engineering, implementation, and customer outcomes—because the best growth motion is still a customer who actually got value. (Stay tuned for a future post on the state of FDEs—forward deployed engineers.)

If the last decade was about scaling the sales machine, the next one looks like it’ll be about scaling the product—and using a smaller, sharper sales effort to amplify what’s already working.