Tech Startup Layoffs: Job Cuts Plunges 60% This Year In January-March, Says Report

Tech Startup Layoffs: Data revealed that in the first quarter of 2023, 43 companies terminated 5,358 employees

Tech Startup Layoffs In India: Indian technology startups have reduced their pace of layoffs this year. In the first quarter of the calendar year, the startups laid off their workforce by over 2,000 employees. However, this represents a 60 per cent decrease compared to the corresponding period last year, according to a tracking website, Layoff.fyi. The decline in layoffs coincided with a reduction in venture capital, as reported by the tracking website. 

Data revealed that in the first quarter of 2023, 43 companies terminated 5,358 employees. Byju’s, an edtech firm, accounted for the largest portion, letting go of 1,500 employees from various departments, including production, design and engineering.

Foodtech Unicorn Swiggy initiated a company-wide restructuring resulting in the layoff of 380 employees, while social media platform ShareChat reduced its workforce by firing 500 employees, accounting for nearly 20 per cent of its total staff. Additionally, Ola, MediBuddy, DealShare, MyGate, UpGrad, and Pristyn Care each laid off more than 100 employees.

Layoffs At Prominent Industry Players:

This year, 11 startups decided to layoff their workforce during the first quarter, and one of them was the prominent e-commerce player Flipkart. The e-commerce giant decided to let go of around 1,100 employees during its yearly performance evaluations. Similarly, Swiggy made job cuts by laying off 400 employees in January, which accounted for almost 7 per cent of its total workforce. Additionally, companies like InMobi, Cure.fit, and Pristyn Care also made similar moves to reduce their staff.

Startups’ pattern of hiring and letting go of employees often mirrors funding rounds and the overall availability of money in the market. In the previous year, when there was a scarcity of funding, around 16,400 employees lost their jobs across 111 companies. Conversely, in 2021, a year marked by increased funding, the number of layoffs decreased significantly to nearly 4,000, as per the report.

With funding rounds returning to normalcy this year, particularly for early-stage companies, it is anticipated that there will be fewer layoffs and longer intervals between them.

There was a 28 per cent increase in early-stage funding in the first quarter. However, seed-stage funding decreased by 7 per cent, and late-stage funding dropped by 46 per cent compared to the same period last year, as per the recent funding data released by Tracxn Technologies, a company that analyses the capital market, reported Business Standard.