New Delhi: A troubling trend of mass layoffs appears to be defining the global startup ecosystem, with at least 104 tech companies laying off over 26,000 employees in the first few weeks of January, according to layoffs.fyi. This indicates that more than 1,600 tech employees were laid off per day on an average in 2023 so far, globally, including in India.
The layoff tracker website shows a disturbing trend of layoffs that has been on the rise since the first quarter of 2022, with over 10,000 employees laid off by 34 tech startups.
In the last quarter of 2022, over 400 tech startups fired more than 74,000 employees – which was even worse than the mass layoffs in the second quarter of 2020 during the COVID-19 pandemic, when over 400 tech companies laid off more than 60,000 employees.
Overall, 1,024 tech companies laid off over 154,000 employees in 2022.
The year 2023 appears to have begun on a bad note for tech workers globally, including in India, signalling worse days ahead. However, hiring experts told the Financial Express in December that the rising number of layoffs among startups and digital platforms is expected to slow down by mid-2023.
According to data compiled by Moneycontrol, Indian startups fired or forced to resign close to 20,000 employees last year, with the highest layoffs in edtech startups.
In 2022 alone, edtech unicorn Vedantu fired 1,000 employees. Its co-founder and chief executive Vamsi Krishna told employees that currently, the external environment is tough. “War in Europe, impending recession fears, and Fed rate interest hikes have led to inflationary pressures with massive correction in stocks globally and in India as well. Given this environment, capital will be scarce for upcoming quarters.”
Incidentally, Vedantu had at least four rounds of layoffs in 2022.
Unacademy fired 1,000 employees in April, and let go of 10% of its workforce in early November. Co-founder and chief executive Gaurav Munjal attributed the layoffs to the funding slowdown.
Over the past two years, more than 30,000 people lost their jobs in India in the tech sector, Mint reported.
Globally, last year was the worse for startups as it exceeded previous records, with retail, consumer, transportation, finance, food, healthcare, real estate, education, and crypto-related tech companies firing most of the employees.
Amazon laid off thousands of employees last year citing economic uncertainty and continued the mass layoffs in 2023. Twitter, which fired half of its workforce after Elon Musk took over as the chief executive, has announced more job cuts this year.
Meanwhile, Indian startups saw a massive 35% drop in funding in 2022, with edtech startups being the worst affected, as compared to the previous years, data provided by Tracxn, a leading global market intelligence platform, showed.
The number of new unicorns in India also halved in 2022 to 21 from 42 in 2021.
In January, Indian startups, including Dunzo, Sharechat, Rebel Foods, Captain Fresh, BharatAgri, Ola, DeHaat, Skit.ai, Coin DCX, LEAD School, Bounce, Cashfree have laid off several hundred employees, the Indian Express reported.
Google-backed Dunzo laid off 3% of its staff, or around 90 people, on January 16, saying that the measure was a result of a restructuring exercise. Last year, the startup had raised $240 million in a round of funding.
Sharechat laid off over 500 employees this month. Rebel Foods, which houses brands like Behrouz Biryani, Faasos, Oven Story, among others, fired close to 2% of its 2,500 workforce due to an ongoing restructuring process in the company.
Note: This article has been edited to reflect that Dunzo had raised $240 million in 2022, not 2023.