Indian startups layoffs saga continues as edtech firm Vedantu has handed over pink slips to its employees. On Wednesday, the Tiger Global-backed edtech unicorn sacked as many as 385 employees or 11.6% of its workforce across human resources, learning and content segments. With this, the company has laid off more than 1,000 employees so far this year. In May, the company laid off as many as 620 employees, followed by 100 employees in August amidst the funding crunch. Moreover, the company’s total workforce has also slipped sharply from 5,500 employees in May to 3,300 in December.
According to reports, the company is offering severance as well as placement opportunities to the laid-off employees. Moreover, in order to maintain its finances and achieve profitability, the company is resorting to cutting down expenses including the salary cut of CXOs by 50%.
Domestic layoffs landscape
Meanwhile, the layoffs are not limited to the country’s edtech space. As the domestic start-ups segment collectively witnesses funding crunch, start-ups across other segments such as food aggregator Swiggy is also planning to 250 employees or 3% to 5% of its workforce in the next few months. According to the reports, the layoffs in Swiggy will be across supply chain, operations, customer service and technology segment, as the company struggles to reduce its losses of $315 million between January to June this year. The company’s losses are much higher in comparision to its rival Zomato, which suffered a loss of $50 million during the same period.
Earlier this week, the health and fitness platform HealthifyMe announced that the company will be handing over pink slips to 142 employees or 7% of its workforce across operations and core team segment. The company has more than 2,000 employees. The company is offering two months severance salary to the impacted employees.
Notably, the layoffs has also crept up to the country’s hospitality start-ups with IPO-bound OYO Hotels and Homes, announcing to let go 3,700 employees or 10% of its workforce across the product and engineering segment in order to achieve profitability. Many working in its corporate and vacation homes teams have also been affected. The layoffs at OYO are seen as a clean-up to carve a path towards profitability and make operations smoother with its partners, ahead of its IPO launch next year. Ritesh Agrawal, the chief executive officer of OYO Hotels, has urged companies hiring in tech to reach out to the company so it could provide job opportunities for the affected employees. Notably, the Softbank-backed company had reported a net loss of ₹333 crore in the July to September quarter this year.
Last month, Amazon announced of shutting down its online learning platform, Amazon Academy starting August 2023. The company said that the decision to wind down operations has been taken following the company’s assessment. The domestic edtech startups have borne the maximum brunt of funding winter with the country’s top ed-tech players Unacademy and Byju’s announcing to hand over pink slips to more than 1,000 and 2,500 employees, respectively. The funding winter is likely to get extended to next 12 to 14 months.
Startups Funding Crunch
Notably, according to a report by Traxcn, between January and November this year, the startups' funding witnessed a decline of 35% to $24.7 billion. Moreover, driven by a lull in late-stage funding, the total number of funding rounds also saw a significant drop of about 30%; the count of investment rounds decreased to 1,841 so far this year from 2,647 rounds seen in the January- November period last year. Late-stage funding, which means investor capital attracted by established startups, dipped 45% YoY to $16.1 billion during this period.
Global layoffs landscape
Meanwhile, the global technology landscape is not isolated from layoffs amidst the dwindling macroeconomic situation. According to reports, Morgan Stanley has become the latest multinational company to lay off 1,600 employees or 2% of its workforce globally. The company has as many as 81,567 employees globally. Moreover, the food and beverage company, PepsiCo is reportedly planning to hand over pink slips to hundreds of employees at the headquarters in North America in order to simplify the organisation for operating efficiently. The company has more than three lakh employees globally, of this over 1.2 lakh employees are employed in the US.
Amidst the turbulent macroeconomic trends and rise in interest rates, several big technology companies have announced massive layoffs and hiring freeze. Last month, the social media platform Meta announced that the company will sack 11,000 employees or 13% of its workforce. Elon Musk-owned Twitter has already sacked 50% of its workforce. Amazon will lay off 10,000 employees. In October, software major Microsoft fired as many as 1,000 employees, or 1% of its workforce, in the third round of downsizing. Snap, the parent company of the social media platform Snapchat, sacked 20% of its workforce to restructure its business.