​​​
  1. Why some start-ups are laying off their staff

Why some start-ups are laying off their staff

START-UPS may be attracting billions of hot money from investors, jacking up valuations, but they are also attracting flak for laying off staffers on a massive scale and shutting down operations.

By: | Updated: December 20, 2015 8:21 AM

In the last six months, 3,270 employees lost their jobs in start-ups.

START-UPS may be attracting billions of hot money from investors, jacking up valuations, but they are also attracting flak for laying off staffers on a massive scale and shutting down operations. As some reports suggest, start-up employees often live under a constant fear of being a ‘victim’ of this ‘market correction’ exercise, leading to undue performance pressure and higher stress levels.

In the past six months alone, as many as 3,270 employees lost their jobs in the start-up space, as per a survey conducted by GrowthEnabler, an online mentoring and advisory platform for start-ups. The survey says, on an average, companies let go 18% of their staff. In 15% of companies, the staff retrenchment levels were above 30%.
But what exactly is causing the pain? If one looks at the funding pattern for start-ups, in the first 10 months of 2015 alone, 25 grocery delivery companies in India cumulatively raised over $160 million. “The intense competition among funded start-ups hurts growth of all participants as they take business away from each other. Employees, hired on basis of growth projections, become redundant when start-ups fail to meet growth numbers,” says Rajeev Banduni, CEO of London-headquartered GrowthEnabler.

“It is a necessary correction in the market. It is a part of the start-up maturity cycle that will eventually make these companies and the entire start-up ecosystem stronger,” he adds.

Gr

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Tags: Start-ups
  1. No Comments.

Go to Top