With investors tightening their purse strings because of the volatility in the global economy, many unicorns and startups such as Byju’s, Swiggy and Ola have slowed down hiring or even resorted to firing employees.
However, hiring intent is likely to improve in the next few quarters, according to experts at staffing and recruitment firms including Adecco, CIEL and Careernet.
“With 2 lakh people employed in the startups in India, layoffs in December to January have been about 2%,” Aditya Mishra, CEO, CIEL HR Services, told ET.
Cost optimisation initiatives have created a longer runway and assured the investors of the agility of the founders, said Mishra.
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“Startups and e-commerce firms that were on a hiring binge in the second half of 2022 and didn’t apply the necessary brakes are mostly firing people,” said Anshuman Das, co-founder of Careernet.Layoffs in recent months range from 3-18%, he said, adding, “Under 5% layoffs is a much-needed clean-up activity with mostly bad hires or wrong hiring decisions.”
Job losses are most prevalent at the junior to mid-level across startups and unicorns, said AR Ramesh, director, Adecco India. “This can be predominantly attributed to key factors like learnability quotient, skill gaps, less stringent entry barriers and wrong hiring techniques,” he said.
CIEL HR Services tracked hiring intent by the number of open jobs listed across various job portals for the study. Until January, the number of open jobs went up 16% compared to the average of October-December. “Thus, we can conclude that the hiring intent is positive now,” said Mishra.
Job losses in the past six months affected those working in domains such as sales, marketing, engineering and administrative. The most impacted were at the entry and middle levels. “Some of the senior employees were also let go due to their high salaries, in the process of cost cutting,” said Mishra.
Also read | Layoffs in 2023: a list of Indian startups & tech companies that have cut jobs
Given the upturn in hiring intent, hiring in the January-June period is expected to increase 10-20% from the June-December 2022 period.
Startups receiving funding in the current environment, like those in online services, enterprise software and mobile apps are likely to ramp up hiring, said the study.
“Our pace of hiring has remained largely unaffected by the macros, since our hiring is in line with our growth and business plan,” said Aayush Ghosh Choudhury, CEO, Scrut Automation.
The company, which runs an information security compliance platform and raised $3 million from Lightspeed and Endiya Partners, is hiring for engineering and business development roles.
Startups which over-hired and expanded according to growth predictions based on increased demand for tech during Covid-19 are the ones downsizing, said Sourabh Deorah, CEO of Advantage Club, a global employee engagement platform.
Advantage Club has raised a total of $5 million on a pre-series A round from investors including Y-Combinator, Jetty Ventures, Earlsfield Capital, SMC Advisors and Kunal Shah.
“There has been no slowdown in hiring at Advantage Club. Our headcount has grown steadily over the past year,” said Deorah.