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Wednesday, February 1, 2023

Bubble Has Burst? 10,000+ Employees Fired By Indian Startups

Startups in India are struggling for funding and are thinking of ways to reduce the cash burn to survive the funding winter, but already they are feeling the heat from their 10000 employees caught up in this fire.

Layoffs In Startups

In 2022, around 10,500 Indian startup employees were let go, as per the data.

The startup industry has been aggressively hiring over the past year.

High employee costs as tech salaries skyrocketed in 2021.

This started the tech hiring and talent war in a year marked by intense investor interest and multiple round of funding.

The data from various industry sources shows that these layoffs are mostly affecting sales and marketing roles.

At the same time, the engineering and product roles have been mostly insulated from the heat.

CityMall Layoffs

CityMall, a social commerce startup based in Gurugram, is the latest entry on the list.

The startup said that it has laid off 191 employees citing restructuring of roles to align to a change in its business model and current funding environment as reasons in a LinkedIn post on Jun 19, 2022.

Before this, the three-year startup had raised $75 million in March.

Investors include Accel, Norwest Venture Partners, Elevation Capital, and General Catalyst.

Not The First One

CityMall is not the only company cutting staff in 2022.

Since the beginning of the year, over 25 startups have laid off large numbers of employees due to funding crunch, reorganization, and so on.

Others have put the blame on employees’ performance and called the layoffs standard.

Startups like Meesho, Cars24, Ola, and Blinkit have laid off their employees in mass numbers.

Edtech Startup Having The Most Burn

The worst-hit startups during this time period were Indian edtech startups.

The demand for remote learning and technology-based education is decreasing with the emergence of offline tuition centers, schools, and colleges.

Those thriving edtech companies in India may be suffering from a domino effect of a slowing demand and a much-discussed funding winter.

Unacademy, Vedantu, Lido Learning, and so on, have been forced to lay off as many as 4,000 employees, which is almost 38 percent of the total layoffs.

SoftBank-backed Unacademy, for instance, lay off 150 more workers on June 18 after letting go of 600 employees earlier in the year.

Currently, the layoff story has taken center stage following a boom year when job seekers received multiple offers and were hired for sky-high salaries, with even BMW cars offered as incentives in some cases.

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