Even though Indian tech startups have laid off over 2,000 employees in the first quarter of the current calendar year, according to data from layoffs.fyi, it’s more than 60% lower than the layoffs announced during the same period last year, when venture capital was starting to dry up in a “funding winter”.
In the first quarter of 2023, 43 companies had laid off more than 5,358 employees, the data showed, not including some companies where the number of employees impacted by the layoffs were not specified. Troubled edtech firm Byju’s was responsible for the largest chunk of layoffs last year during Q1, when it had fired 1,500 employees across design, engineering and production teams.
Besides Byju’s, foodtech unicorn Swiggy had laid off 380 employees in a company-wide restructuring, while social media platform ShareChat, owned by Mohalla Tech, had fired 500 employees or nearly 20% of its staff. Ola, MediBuddy, DealShare, MyGate, UpGrad and Pristyn Care were also on the list of companies who had laid off more than 100 employees during this period.
This year, 11 startups have laid off employees in the first quarter, including Flipkart which reportedly laid off about 1,100 employees as a part of its annual performance reviews. Besides Flipkart, Swiggy laid off 400 employees or nearly 7% of its workforce in January, while InMobi, Cure.fit and Pristyn Care were also on the list.
For new-age startups, the cycles of hiring and layoffs are largely linked to its funding rounds and the availability of capital in the market. For example, last year, which had seen the peak of the funding winter, had recorded nearly 16,400 employees getting laid off from 111 companies, while layoffs in 2021 – the year which saw a boom in funding – were close to 4,000.
As funding rounds begin to normalise again this year, at least for early-stage companies, layoffs are expected to be fewer and farther apart. According to latest funding data from Tracxn, early-stage rounds saw a rise of 28% in Q1, while seed-stage saw a minimal decline of 7% and late-stage rounds were down by 46% over the same period last year.
