Microsoft Corp. this week said it would lay off a small percentage of its staff, following earlier layoffs at Netflix, Coinbase Global Inc. COIN 0.69%▲ and Twitter Inc. Alphabet Inc.-owned Google’s CEO Sundar Pichai also told employees this week the company would slow the pace of hiring for the rest of the year. And the head of engineering at Meta Platforms Inc., parent of Facebook, told his managers to identify and report low-performing employees to manage them out.

One tech worker, 40-year-old Lindsey Collins Guest, said she experienced these shifting expectations firsthand. In May she was laid off from Bolt Financial Inc., a payments-focused financial technology company, and during her search prospective employers floated base salaries that were an average 30% lower than what she had been making. She finally accepted a job with a live-streaming shopping startup that met her minimum salary requirements.

“It was obvious to me that the good old days were kind of over,” Ms. Guest says.

Lindsey Collins Guest said prospective employers floated base salaries that were an average of 30% lower than what she had been making in her last job.PHOTO: LINDSEY COLLINS GUEST

One reason for this change in bargaining power at startups: Capital isn’t flowing as freely. As venture firms tighten up terms and investors offer survival advice to portfolio companies prepping for a downturn, startups are more focused on cutting costs than rapid growth. That means spending exorbitant amounts of money on salaries to attract new hires is coming to an end, say those who help recruit for the portfolio companies of venture capital firms.

Not all employees are at a disadvantage. After all, there are still more roles open in the industry than there are people to fill them. Job postings for tech positions reached 505,663 in June, a 62% increase over the same time a year ago, indicating employers that are dialing down hiring are more than offset by those still adding to their ranks, says CompTIA, an IT trade group. Microsoft, for example, will still increase its head count in the coming year despite the layoffs.

Highly skilled workers in areas such as machine learning and artificial intelligence can still name their price, recruiters say. Nearly a third of all tech job postings in June were for software developers and engineers, according to CompTIA. The number of software development job postings that mention remote work had also risen to nearly 38% at the end of June, up from around 32% during the same period a year ago, according to Indeed.com.

The current gap between salary expectations and reality is, in part, due to how high compensation got in 2021, says Saydeah Howard, chief talent officer for IVP, the venture firm that has invested in Dropbox, GitHub Inc., and Snap Inc. The 2021 increase “was outrageous” and “unseen before,” Ms. Howard says.

Candidates who want to go into an office may have an edge over those seeking remote arrangements, according to venture capitalists and recruiters. Ms. Howard said executives now tell her they prefer to hire candidates who are enthusiastic about being in the office. “Now, not all of them will say that out loud,” she says.

Some venture capitalists have been less shy about broadcasting their preference for companies who call workers back: Keith Rabois, a partner with Founders Fund, tweeted in May how he was looking to fund “IRL”—or “in real life”—startups.” Josh Wolfe with Lux Capital last month tweeted his support of Elon Musk’s office mandate for Tesla employees.