The Indian startup industry has grown at an unprecedented rate over the last several years, attracting talented entrepreneurs and investors. However, with the recent global economic challenges, many Indian startups are now facing the difficult decision of mass layoffs. This trend affects not only the employees who lose their jobs but also the company and the broader economy.
In this article, we will explore the reasons behind the rise of mass layoffs in the Indian startup sector and the impact of global layoffs on the Indian workforce and the economy.
An overview (list) of startups that recently laid off employees
Over 70 startups have laid off around 22,000 employees from the start of 2022 till January 2023. Listed below are the many Indian startups that recently laid off employees:
- SirionLabs fired 130 employees, or around 15% of its workforce, days after announcing $25 million in Series D fundraising.
- Innovaccer, a Tiger Global-backed health tech unicorn, fired around 15% of its workforce, or 245 employees, in the second round within four months.
- Swiggy fired 380 employees, or 5% of its workforce.
- Hubilo, an event management startup, laid off 115 employees, or around 35% of its workforce.
- Mohalla Tech Pvt Ltd, Sharechat and Moj parent company, fired 500 employees or about 20% of its workforce.
- CoinDCX fired 50 employees, or 8% of its workforce.
- Ola fired 200 employees, citing restructuring as the prime reason.
- Meesho shut down most of its Superstore business, resulting in almost 300 employees.
- Cashfree Payments sacked 80 employees, or around 13% of its workforce.
- LEAD, a Mumbai-based ed-tech startup, laid off around 60 employees.
- Harappa Education, an upGrad-owned ed-tech startup, fired almost 73 employees, or 40% of its workforce, in 2023.
- PayU India laid off around 6% of its workforce or 150 employees.
- Vedantu fired 385 more employees for the fourth time, taking the total count to 1,109.
- HealthifyMe fired 150 employees, or about 15% to 20% of its workforce, citing the global recession as the primary reason.
- OYO fired 600 employees from tech roles in engineering and product teams.
- Teaching, an ed-tech startup, laid off 45 employees or about 5% of its workforce.
- Hirect laid off 200 employees or 40% of its workforce, citing the change in business model and organisational restructuring.
- Zomato laid off about 3% to 4% of its workforce.
- Plum fired 10% of its workforce, or about 36 employees, as part of a cost-cutting exercise.
- Unacademy fired 10% of its workforce in the third round of layoffs, taking the total to 1500 for the year.
- BYJU’S, one of India’s most well-known startups, laid off 2,500 employees.
- WazirX laid off around 40% of its workforce, with adverse economic conditions as the primary reason.
The edtech industry has seen the maximum layoffs, with 17 startups laying off more than 8,000 employees. Furthermore, five ed-tech startups even shut down in 2022. Edtech was followed by consumer services and e-commerce. The three sectors together have laid off nearly 17,200 employees.
The start of 2023 has brought unfortunate news, with layoffs by over 20 companies already affecting 3,380 people in the first month of the year. It is in stark contrast to the layoffs by 55 companies seen in the startup industry throughout all of 2022.
What has led to massive layoffs?
Capital crunch, restructuring, and adverse economic conditions have been cited as the primary reasons for massive layoffs. Jeffrey Pfeffer, Professor at the Stanford Graduate School of Business, believes these layoffs are contagious, stating companies may be laying off people by imitating other organisations. Pfeffer described it as a snowball effect of sorts.
Meanwhile, investors such as Y Combinator and Sequoia have instructed startups on how to survive – Reduce costs. The layoffs can be viewed as part of this endeavour.
How do global layoffs affect the Indian workforce?
Global layoffs can have both short-term and long-term impacts on the Indian workforce. The immediate effect of global layoffs is the increase in unemployment. The sudden surge in jobless individuals can lead to a highly competitive job market, making it even more challenging for those struggling to find employment.
In the long term, the impact of global layoffs on the Indian workforce can be seen in decreased economic growth. The loss of jobs can lead to decreased consumer demand, decreased investment, and lower economic growth. It can result in further job losses, creating a vicious cycle of unemployment and economic decline.
It also leads to a decrease in remittances from abroad. Many Indian workers are employed abroad, and their remittances form a significant part of their families’ income back home. The loss of jobs due to global layoffs can decrease these remittances, affecting the livelihoods of families who depend on them.
