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In June, edtech decacorn Byju’s had offered a software development engineer’s job to a Bengaluru engineering college student. Since he took up the offer, he wasn’t allowed to apply for jobs in other companies due to the college’s placement policy. But that proved to be his bane. In just five months, he was one among the 2,500 employees who were handed over a pink slip by India’s most valued startup.
“Instead of hiring and then letting me go, it (Byju’s) could have revoked my offer. I could have applied for jobs at other companies,” the student, who has started preparing for job interviews again, rued. “Now I am neither a fresher nor will my 4.5 months’ work count as experience,” he said requesting anonymity. He is not alone. Three of his batchmates suffered the same fate as part of the company’s drive to become profitable by March.
Most edtech startups, including several unicorns (privately held firms valued at $1 billion or more), sacked their employees to cut costs. Over 19,000 jobs were affected this year across startups. The situation was exacerbated by Big Tech such as Twitter, Amazon and Meta slashing headcounts.
“2022’s impact on India’s startup ecosystem has forced founders to rethink their principles. As the focus moved to businesses solving real-world problems, there was a strong need to build more viable companies that focused on serving customers’ needs profitably,” Manu Rikhye, partner, Merak Ventures, said.
Initially, layoffs were limited to roles such as customer support, sales, admin, and content. But as the year came to an end, even tech employees weren’t spared. Oyo, Zomato and Byju’s as well as global companies went on to fire a large number of employees. “While there may be near-term pain and challenges, these shifts will force the businesses towards frugal innovation, concentrate capital behind successful ideas, drive scale and deliver long-term value, ” Rikhye added.
Investors and recruiters have sounded caution that more job cuts are likely, depending on the funding scenario. Global factors such as high interest rates and inflation, the Russia-Ukraine war and looming global recession may decide the funding environment and, hence, the number of layoffs, said Ashish Sharma, managing partner, InnoVen Capital, a venture debt investment firm.
“Most companies have taken tough actions this year and cut costs, and the focus will continue to remain on unit economics and path to profitability,” Sharma said.
Anjali Raghuvanshi, chief people officer at recruitment firm Randstad India is, however, optimistic about the job market. Firms are adding employees to teams, with some clients still hiring in large numbers. “They are not going all guns blazing with hiring. They are a bit cautious,” she said.
Raghuvanshi, however, said that hiring has dropped in 2022 compared with last year. “It’s been slow, but even the slowdown is in slow motion. No one’s slowing down drastically like how it was in the pandemic,” she added.
Some firms are in a wait-and-watch-mode, hiring for critical positions and replacements to balance attrition, and avoiding mass recruitments. “Startups (due to funding crunch), would be conscious and mindful. You don’t expect them to hire big,” she said. However, the situation would still be better than (pre-covid) 2019, she added.
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John Miller has been writing about science, gaming, and tech culture for over a decade. He’s a top-rated reviewer with extensive experience helping people find the best deals on tech and more.
