17,000 and counting: Jobs cut by startups in India in 2023

With no thaw in the funding winter, the Indian startup ecosystem is seeing unprecedented mass layoffs, leaving thousands without jobs. In the first half of the year 2023, startups in India have reportedly cut over 17,000 jobs, claims data from recruitment and staffing firm CIEL HR. According to a report in Economic Times, quoting the recruitment and staffing firm, startups, which typically depend on external investments for growth, downsized after a slump in investor funding forced them to cut costs and conserve cash. The report pegs the number of startups that have cut jobs in the country during the first half of the year to 70.

Segments that have seen job cuts
The sectors that have seen layoffs include e-commerce, fintech, edtech, logistics tech and health-tech. The e-tailers in the list are across industries. The names also include some of the biggest unicorns like Byju’s, Meesho, Unacademy, Dunzo, GoMechanics, Swiggy and ShareChat.

Funding winter
The lack of new investments flowing into the industry is said to have become one of the biggest challenges for these startups, resulting in cost-cutting measures and cash conservation. According to estimates by PwC, funding for startups declined to $3.8 billion in the first half of 2023 from $18.3 billion in the year-ago period, recording a year-on-year fall of nearly 80%.
A report by RedSeer names several factors that are impacting this sustained funding for startups. These include increasing capital costs, interest rates, and a decline in the value of technology stocks. The firm’s analysis of approximately 100 unicorns indicates that nearly 20% of them could face challenges in the coming years due to unclear business models, regulatory hurdles, and decreasing demand, with some possibly having to shut down, pivot to new models, or be acquired.