Layoffs across Indian startups have crossed the 10,000 mark as companies struggle to raise funds and are finding ways to reduce their cash burn to survive the funding winter. More than 10,500 Indian employees working at startups were let go in 2022, according to data based on Moneycontrol Research and other media reports.
This comes after a year of aggressive hiring by startups and high employee costs as tech salaries skyrocketed in 2021. Startups led the tech hiring and talent war in a year that saw immense investor interest and multiple rounds of fundraises by these companies.
These layoffs are largely being done in sales and marketing roles, according to various industry sources, while engineering and product roles have been mostly insulated from the heat.
The latest to join the fray is Gurugram-headquartered social commerce startup CityMall. In a LinkedIn post on June 19, 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.
The three-year startup had raised $75 million earlier in March and is backed by investors including Accel, Norwest Venture Partners, Elevation Capital, and General Catalyst.
CityMall is not alone in downsizing its staff in 2022. Since the beginning of the year, over 25 startups have laid off employees in large numbers citing funding crunch, restructuring, and so on. Some even put the blame on employees’ performance calling the layoffs standard.
Startups like Meesho, Cars24, Ola, and Blinkit have fired their employees in masses. However, the worst-hit during the current period remain the Indian edtech startups.
With physical tuition centres, schools, and colleges opening up as COVID-19 restrictions ease down, the demand for remote learning and technology-based education services is dropping.
The slowing demand coupled with the much-talked-about funding winter has had a domino effect on India's thriving edtech companies like Unacademy, Vedantu, Lido Learning, and so on, forcing them to lay off as many as 4,000 employees, making almost 38 percent of the total layoffs.
On June 18, for instance, SoftBank-backed Unacademy laid off another 150 employees, after letting go of around 600 employees or 10 percent of its workforce earlier this year.
The layoff story has taken centre stage now after a boom year in which job seekers received multiple offers and were hired for sky-high salaries with even BMW cars offered as incentives in some cases.