“It looks like someone has put a tiny prick in the bubble. Overall, the sector may continue hiring, but there is investor pressure on many e-commerce and edtech firms.” are not working. Those working in the lower strata of sales, distribution and operations will have to be let go,” he said.
ABC Consultants has asked its outplacement team to keep an eye on the sector for layoffs and subsequent placements.
A Bengaluru-based recruiter working for the startup sector expects a total layoff of 4,000-5,000 employees. “During the two years of Covid, we knew where and why layoffs were happening. However, this time it is worrying us as there is no clear reason for it.”
So far startups have laid off employees after identifying redundancies, sometimes after acquisitions. Anshul Lodha, Head, Page Executive, India, said, “In the absence of funding, and massive sell-offs in tech stocks globally, startups are now being forced to focus on cash flow and profitability, thereby To rationalize headcount and other costs.” Wage growth is also expected to be stable.”
Edtech startups have laid off at least 1,500 employees, including teachers, contract workers and sales staff.
Earlier this month, Vedantu Innovation Pvt. Ltd. said it was laying off 200 employees following “load rebalancing” of specific roles based on growth expectations. In April, Unacademy said it had laid off about 800 employees, including employees of PrepLadder, which the edtech firm acquired last year. Back then, the edtech firm said redundancy and performance issues were the major reasons for the layoffs.
Some startups said that the alienation from employees was not due to layoffs but because of transfer requirements and better job opportunities.
A person with knowledge of the matter said that at least 200-250 employees have resigned from White Hat Junior in the last two months, as it has asked employees to report to the office in Mumbai and Gurugram. Inc42 and the Financial Express reported that 800 White Hat Junior employees had resigned.
A White Hat Jr. spokesperson said the edtech firm had offered rehabilitation assistance and provided exceptions for medical and other emergencies.
Earlier this year, edtech Lido Learning asked employees to resign because the startup could not pay salaries due to its inability to raise capital or find buyers. Lido Learning CEO Sahil Seth on Sunday disputed the number of employees who had to leave, but did not give details.
“There are many edtech firms in the startup sector that have hired in large numbers during the pandemic as education went online. Now, with schools reopening, the demand for online programs has reduced,” said Aditya Narayan Mishra, Director and CEO, CL HR Services. In many startups, the leadership is very young and they are hired to run the house. That’s a growing business, Mishra said. It’s backfired on them now.
He added that the edtech sector has 400,000-500,000 employees, and with 5,000 people being laid off in the next two quarters, this will not stop them from joining the industry. Some startups said that they are still hiring despite rationalization of employees in some divisions. Those who raised capital last year have a buffer and will continue to operate in specific verticals, two startup executives indicated, seeking anonymity.
A Vedantu spokesperson said it planned to hire 1,000 people this year, as VCircle reported in May.
A person with knowledge of the matter said that while Swiggy has shut down its grocery deliveries in five cities, it will fix roles for all its Super Daily employees in other verticals of the business. A blog post said that senior officers of Super Daily have been transferred to other units. The person said that Swiggy had also hired 500 employees as part of the Dineout deal last week.
Meesho lays off 150 employees integrating its grocery business into the main app. However, social and e-commerce startup Meesho said it plans to hire more in tech and product roles. “We hired a record 150 employees in tech last quarter. We plan to hire around 1,000 employees this year, which includes doubling our technical team,” said a Meesho spokesperson.
According to multiple media reports, fintech OKCredit, furniture rental business Furlenko and social commerce startup Trail have also let go of employees since January.