More startups to shed flab amid valuation bloat; layoffs 57% of CY22

Globally, 683 companies laid off 194,659 workers in 2023. This is already 18 per cent more than the 164,591 seen in 2022

Thousands of job losses in big start-ups hint at a trend of more pink slips in 2023 than the previous year at the present-day pace.

Some 8,134 employees have reportedly lost their jobs in India as of May 2023, according to data from technology’s (tech’s) big layoff tracker Layoffs.fyi.

The database collates figures which appear in several media reports. This is not an exhaustive list but may be broadly indicative of the trend in tech companies amid an adverse funding environment and a global economic slowdown.

The number so far into the fifth month of the current calendar year is already 57 per cent of the earlier calendar year’s number. There were 14,224 layoffs in 2022 — a sharp increase from the 4,080 seen in 2021. The number was also higher than was seen in the first year that the novel coronavirus assumed pandemic proportions in 2020 when 12,932 jobs were lost. 

However, the pace of job loss in India seems slower than elsewhere. Globally, 687 companies laid off 197,837 workers in 2023. This is already 18 per cent more than the 164,591 seen in 2022. 

In the first quarter of calendar year 2023, the funding of Indian start-ups reportedly declined 75 per cent to $2.8 billion, according to data from start-up tracker Tracxn Technologies.  

Among India’s tech companies, education-associated start-ups are the worst affected, recording the maximum number of layoffs, reveals data. The sector laid off twice as many employees as the next biggest sector in terms of job losses in 2023.

Other sectors with maximum layoffs include retail (1,162), food (915), consumer (718), and health care (561).  Other affected sectors include finance, transportation, and data.

Of all the cities, Bengaluru reported the highest layoffs in 2023. The city also has the highest volume of start-up activity in the country. Other places which have seen a large number of layoffs include Gurugram, Mumbai, Chennai, and New Delhi.