Layoffs continue at startups; funding winter, macro uncertainty to blame

Amid global financial uncertainty, layoffs at young startups continue. Recent developments inform that about 9,400 employees were laid off in the January-March period, according to a report published in The Economic Times (ET) that cited information from a hiring firm, Careernet.

New-age companies like Byju's, Unacademy, social media firm ShareChat, MyGate, and automobile-servicing startup GoMechanic were among the leading names that fired employees in large numbers. The report added that 7 in 10 startups fired 100-130 of their employees during this period.

Quick delivery platform Dunzo, health tech software-as-a-service (Saas) startup, Innovaccer and the cab-booking major Ola also fired employees.

As the news of layoffs continues, a steep decline in new hiring has also been registered. A downfall of around 80 per cent has been registered in the March quarter compared with the same period last year, ET reported.

Edtech startups fired the most number of employees, over 1,000, during this period, the report added.

The situation ahead

The co-founder and CEO of Careernet, Anshuman Das, said that the situation is unlikely to improve in the next six months. He added that while new funding is possible, hirings are expected to remain slow. He said all sectors have experienced job cuts, except for SaaS, and job cuts are likely to happen in SaaS as well.

More trouble ahead!

Several founders and investors with adequate capital have shared their concerns about resuming hiring and planning for growth. Keeping the macroeconomic uncertainties in mind, the report said they are exercising caution.

Talking about the job situation as he fired 380 people at his company, Swiggy founder Sriharsha Majety said that the food-delivery firm had hired too many employees. He had said, "Our over-hiring is a case of poor judgement and I should have been better here."