Life after layoffs: How people are coping after losing jobs in Indian startups

;;When Diya Seth, 26, lost her job at an edtech startup in February 2022, it threw a wrench in her family and career plans.

Seth’s employer initially promised to pay her dues, but six months on, filed for bankruptcy, leaving the entire workforce in the lurch.

“I have about Rs 75,000 due with the company. We haven’t heard from them for months now. The founder doesn’t respond to us when we reach out and there is no point of contact anymore,” Seth told Moneycontrol in a virtual interaction, 14 months after the company shut shop.

Seth is not alone. Moneycontrol spoke to at least 10 people, who found themselves stuck in the post-pandemic turmoil within the Indian startup ecosystem, to understand how they scraped through Annus Horribilis, a year of misfortune for startup employees.

Seth, a former public relations professional, had taken the job in October 2021, attracted by the offer of a handsome pay cheque that would help her support her father and two younger siblings, and also fund her plans to study abroad.

She didn’t let the setback get her down for too long. Seth started searching for her next in May 2022. She then came across a ‘free’ test offered by an edtech startup that claimed it enabled job seekers to land a gig in under 15 days of clearing it. She applied.

Little did Seth know she was stepping into another trap. In the events that followed, Seth had to walk out without a job in her hand after paying Rs 65,000 for a course meant to help her ace the test, no mean sum given her lack of a steady income.

“It was not at all easy for me to find a job after that. None of the good companies were accepting my profile,” said Seth, who faced endless rejections after sitting for multiple interviews for two consecutive months.

Plan-Bs and pay cuts

To be sure, Seth has now found a job. Yet, there are many who are unemployed and living off of their savings over the past year.

Faihan Ahmed, 29, still gets numerous calls from former colleagues and juniors enquiring about job openings.

“There are many who have not found a job or had taken temporary employment and want to move out at the first opportunity,” he told Moneycontrol.

His last employer, another edtech startup, let go of most employees around June to July 2022.

With over half of the total layoffs, edtech employees had to face the most heat. Slowing demand for online learning, coupled with a drop in funding from Private Equity and Venture Capital firms, has had a domino effect on India's once thriving edtech companies.

Also Read: India's five edtech unicorns spend over Rs 2,250 cr on advertising; Rs 5,500 cr on employees in FY22

“Many have even begun taking up courses like SEO and coding to switch their careers completely and move to fields with better pay and prospects,” Ahmed said. SEO is short for Search Engine Optimisation.

Ahmed believes that employees who stay within the sector have to take massive pay cuts compared to their last salary and job seekers outnumber existing open positions.

“People are willing to work for Rs 12 lakh per annum (LPA), then why would companies pay Rs 30 LPA in salaries? Earlier, educators were even paid Rs 60 lakh to Rs. 1 crore for IIT Advance level coaching; maximum salary drawn now has come down to Rs 30-35 LPA,” he said.

With plunging salaries, employees in senior positions, especially those who were their families’ sole breadwinners, had to cut expenses and still keep searching for companies who can match their last salary.

“My company tried to retain the junior teachers but they were not able to afford senior faculties with high pay, and hence we were let go. I am getting offers but very few are ready to match my last salary,” said Divesh Gupta, who saw many of his colleagues being sacked in the series of layoffs at the company and was later terminated in February.

Nitin Desai, 27, a techie who was recently let go, said salaries had taken a hit across job roles. “I have been getting offers, and almost all of them asked me to take a pay cut. But I have put my foot down and don’t plan to take a pay cut as my last drawn salary was reasonable, not too high or low for my profile and job role,” he said.

Desai also wants to get placed soon because he and his wife are the only earners in a family of five and many of their plans have abruptly been put on hold.

Annus Horribilis

The mass layoffs at the start of 2022 followed a year of aggressive hiring and high employee costs as salaries in sectors like education and tech rocketed in 2021, a time when new-age startups led the talent war to support unprecedented growth with funds pouring into the Indian startup ecosystem.

With funding drying up, a number of companies, including the most well-funded, laid off close to 20,000 employees in 2022 alone, Moneycontrol reported earlier. Currently, the number stands around 26,000.

Moneycontrol also reported how funding for India’s startups fell to about a third in the first quarter of 2023 compared to the same time last year, according to Tracxn. In March alone, investors participated in 122 rounds and invested about $3.6 billion, against $5.69 billion invested across 406 funding rounds in the year-ago period.

The rough patch for startup employees spilled into 2023 after a tumultuous year with a number of companies handing close to almost 6,000 pink slips in just the first four months to keep costs in check.

2023 Q1 Layoffs; The graphic is based on Moneycontrol research and various media reports, Pristyn Care maintains that the company let go of about 45 employees only

On the same boat

Employees say colleagues who were in the same boat through the struggle have been a constant source of support.

Desai said while his family had been there throughout, his colleagues, with whom he had built strong friendships, acted as a support group.

“They were laid off with me. We shared the same fears and worries. After a while, we motivated each other to move on from what happened and start looking at what’s next,” he added.

Many employees from the same companies or sectors have created their own groups and continue to share job openings, advice, referrals, and sometimes even share harmless jokes about old employers.

Buzzing social media

The series of layoffs that dominated headlines over the past year followed by employees knocking on all doors to find jobs. Throughout the year, many took to social media to request prospective employees for jobs.

Many disgruntled employees even shared their tales of ordeal and in some cases, shamed the companies for leaving dues unpaid, resulting in bad blood.

When Hemant Mehta, a laid-off employee, reached out to his ex-employer for repayment of his dues after being let go abruptly in September 2022, he faced retaliation.

“Most of my team were paid their dues by December last year. When I asked the founder why my payment was on hold, he lashed out at me. After multiple requests, the company asked me to write an apology letter for sharing public posts on social media as it apparently resulted in them losing an important deal,” said Mehta.

Mehta, who promptly sent the apology, finally received his complete payment within days in January.

Losing will for hard work

With such instances becoming common, employees said they were losing the will for hard work and loyalty to the founders’ vision.

“They did not sweat once and laid us off! It's tough to support a company’s vision and show loyalty when you know you are so dispensable for the company,” said Yash Pawar, 27, who was let go from an agritech startup in May.

After constant interviews and rejections between August and December, Pawar took up a job at an edtech startup, but said he was constantly looking for a way out.

“The work culture is intolerable, they never informed me about my shift timings. The targets are unachievable, and when you don’t (achieve them), managers get abusive,” said Pawar, who plans to either take up a job at a big corporation or study for his PhD, which he has been holding off for some time.

Desai shares Pawar’s opinion and plans to stay away from startups for a while. “In an attempt to move fast and get things done faster, startups often rely on third parties instead of creating their own means. After the first few months, you run out of work. There is less room for learning,” he said.

Pawar is in the final rounds of the recruitment process in a legacy private company and hopes to soon land the job.

Silver lining

Some laid-off employees are still hoping for better days to come. Others are better off.

Deepak Singh, 29, after being laid off suddenly last year, was burdened by a home loan. Switching a couple of jobs over the last year, Singh has now doubled his pay and is comfortably paying off his bills.

While the setback pushed his and his wife Geeta’s plans to study further to build their careers, the couple is now planning to start a family.

“We are doing pretty well here. We do plan to pursue higher studies someday but currently, we want to enjoy this moment with our family,” said Singh.

Also Read: Shattered Dreams, Humiliation, Fight For Survival: How laid-off startup employees are coping

Vidya Shukla, 31, who faced a similar ordeal in June last year and did not wish to take up a school job because it paid less, was able to secure a job right the next month at another edtech startup.

“It's so much better than my old company, I think it has the best work culture, bosses and even founders. It's flexible too as they allow me to work from home, which suits me very well. I am enjoying my new work,” Shukla said.

There are some who found ways to rekindle their side hustles and old passion projects. Tarun Dev, 24, is in search of artist managers and public relations professionals. “...I keep making jokes, did I tell you I am into comedy? Now that this happened why not give it a shot,” joked Dev.

Desai too has got back to photography and travel, things he said he used to enjoy a lot. “It really helped me get my head straight, I plan to do this more often,” he added.

Employees, who were caught unawares about being sacked, have had contrasting experiences over the last year. Many are still struggling to get back on their feet as a new startup joins the list of companies laying off employees every few days. The tough times aren’t ending anytime soon.

Total layoffs by Indian startups since 2022; The graphic is based on Moneycontrol research and various media reports, Pristyn Care maintains that the company laid off about 45 employees only