Large corporations around the world aren't the only ones affected by the layoffs. According to a recent survey, 9400 people may have lost their jobs between January and March this year in India's thriving startup environment. Additionally, the problem isn't only affecting organizations in the edtech industry; those in the services sector have also cut back on resources during this lean and mean period.
Byju's Unacademy, ShareChat, MyGate, and GoMechanic are among the companies that, according to research released by Careernet, have let go of personnel. However, the survey also indicated that the tendency was widespread, with 70% of all startups letting go between 100 and 300 individuals each in the quarter.
While noting that hiring for senior posts had also decreased by about 80% during the quarter compared to the same period last year, the Careernet report cautioned that layoffs could continue. According to the survey, a similar tendency might be seen in finance, e-commerce, healthcare, and a few other industry sectors.
The e-commerce and edtech sectors, who's hiring has decreased by 93% and 84%, respectively, in the quarter, have seen the greatest effects of the financing winter. The data indicates that close to a thousand positions were eliminated during the first quarter of 2023, and edtech also had the highest number of layoffs.
As investors tighten both seed and series-A funding, the situation will last for at least two more quarters, according to Anshuman Das, co-founder and CEO of Careernet, who was quoted in the story. Except for a handful, such as SaaS, where the slaughter isn't as bad, he claimed that jobs across the majority of sectors had been lost. Even though the situation seems awkward, the truth is that a number of entrepreneurs and their investors are already spotting signs of development and preparing their businesses for expansion with a revised prognosis based on the global macroeconomic situation that is currently developing.
Market observers predict that salary increases will either be frozen or modest, while layoffs may last for some time longer. Companies have had to refocus their plans as a result of the economic volatility in North America and Europe, given that they employed employees last year and the year before, anticipating a boom in growth.
The management of Swiggy informed its workforce in January that it would be letting go of 380 people as part of a right-sizing initiative. Readers may remember this. The company's founder, Sriharsha Majety, openly admitted in print that this was an instance of overhiring and bad judgment that should have been prevented.
The recruiting pace at technological businesses may be slow, but it is not the same in more established industries like banking, insurance, and financial services. Many multinational corporations are growing their staff in India, giving workers who received pink slips from their startups new opportunities. Additionally, the Careernet report noted 260 funding transactions totaling around $3.4 billion in the first quarter of the year.
From $12 billion the previous year, this indicated a value drop of more than 70%. 110 of these deals, totaling $214 million, were for seed stage; 41 were for pre-series, totaling $163 million; 55 were for growth stage, totaling $887 million; and 24 were for late stage, totaling $2.1 billion.
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