The Indian startup ecosystem received funding of $42 billion in the last year but a layoff season has currently taken over the country. Networking platforms like LinkedIn are seeing a large number of posts from young workers who have been fired.
Companies are sugarcoating the firing frenzy with terms like restructuring, cost cut, shutting non-performing verticals, cutting marketing spending, and freezing fresh hiring.
A big part of the workforce being fired is young employees who quit traditional and stable jobs to work in startups. Indian startups were hiring a lot during the pandemic. However, as things are returning to normal, over 6,000 have been fired from all fields. Experts think the looming recession and funds drying up are going to make things worse.
Edtech giant BYJU's forced over 1000 employees from its WhiteHat Jr. The firm had 5,000 employees including teachers on contracts in April. Around 3000 of them, in sales and support, were asked to report to Mumbai or Gurugram. Not being able to cope living in new locations for unreasonable salaries, over 1000 were forced to resign.
Another edtech platform Unacademy also laid off 600 out of its 6,000 employees including educators and other contractual workers. CEO Gaurav Munjal said the funding winter will last as long as 18 months and the management must "focus on profitability".
Another online learning startup Vedantu fired over 420 employees citing the same reason. CEO and co-founder of Vedantu Vamsi Krishna said the external environment is tough as the Russia-Ukraine war.
Edtech platforms are not the only startups dealing with a crisis. Healthtech platform mFine has laid off over 50% of its workforce and cited "steep change in macro-conditions" as the reason. Pre-owned e-commerce platform CARS24, a platform valued at $3.3 billion, fired around 600 employees based on "poor performances".
Despite the booming food delivery business, Zomato-owned Blinkit fired over 1,600 employees citing cost-cutting in cities like Mumbai, Hyderabad, and Kolkata. E-commerce platform Meesho let go 150 full-time employees from its grocery business owing to a "restructuring aimed at efficiency".
Some startups are expecting the funding winter last for the next 24 months.