In June, edtech decacorn Byju’s offered software development engineer jobs to Bengaluru Institute of Technology students. Since he accepted the offer, he has not been allowed to apply for jobs at other companies due to the university’s placement policy. In just five months, he has become one of his 2,500 employees to be given a pink slip from India’s most valuable startup.
“Instead of hiring me and then letting me go, it (Byju’s) could cancel my offer. I could have applied for a job at another company,” he said, starting preparing for a job interview again. The student regretted it. he is not alone. Three of his colleagues suffered the same fate as part of the company’s efforts to reach profitability by March.
Most edtech startups, including some unicorns (privately held companies valued at over $1 billion), laid off employees to cut costs. More than 19,000 jobs were affected across startups this year. The situation was exacerbated by big tech such as Twitter, Amazon and Meta laying off staff.
“The impact on the Indian startup ecosystem in 2022 is forcing founders to rethink their principles. There is a strong need to build a more viable company focused on,” said Manu Rikhye, partner at Merak Ventures.
Initially, layoffs were limited to roles such as customer support, sales, administration, and content. But as the year drew to a close, even tech employees couldn’t escape. Oyo, Zomato, Byju’s and global companies continued to lay off large numbers of employees. “While there may be short-term pain and challenges, these changes will push businesses toward frugal innovation, focus capital behind successful ideas, scale, and deliver long-term value. I will,” he added Rikhye.
Investors and recruiters are mindful that more job cuts may occur, depending on the funding scenario. Global factors such as high interest rates and inflation, the Russia-Ukraine war and a looming global recession could dictate the funding environment and thus the number of layoffs, said the venture debt investment firm. He is managing partner at InnoVen Capital, Ashish Sharma.
“With most companies taking tough actions and cutting costs this year, the focus remains on unit economics and the path to profitability,” said Sharma.
But Anjali Raghvanshi, chief people officer at recruitment firm Randstad India, is optimistic about the job market. Companies are adding employees to their teams and some clients are still hiring in bulk. “They’re not all out on hiring. They’re a little cautious,” she said.
However, Raghuvanshi said employment in 2022 will be down compared to last year. “It was slow, but even the deceleration is slow motion. No one is slowing down as dramatically as during the pandemic,” she added.
Some companies are in wait-and-see mode, adopting alternatives to balance hiring for key positions with downsizing, and avoiding mass hiring. “Startups will be conscious and cautious (because of the lack of funding). I don’t expect them to hire at scale,” she said.
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