“For them, we’re just numbers on paper,” says an angry engineer, who was recently laid off from a Delhi-based start-up. “But in reality, behind those numbers are actual people, with bills to pay and families to feed,” he says. Start-ups in India are still laying off people. However, numbers suggest that the pace of this has gone down. Data sourced from layoffs.fyi shows that in the third quarter of 2023 — June 1 to September 30 — at least 3,054 start-up employees were laid off in India. This is the lowest number of layoffs in a quarter since Q3 2022. Globally, too, start-up layoffs stood at a four-quarter-low at 24,827.
In 2023, until September 30, at least 13,978 people were laid off from Indian start-ups. This is very close to the number of layoffs in the whole of 2022. In Q1 and Q2 of 2023, 5,485 and 5,358 start-up employees were laid off, respectively. The real numbers could be higher since some start-ups haven’t revealed the exact number of people who were shown the door.
Firing of start-up employees was very high in the second quarter of 2020, when the pandemic hit and the country went into lockdown. More than 10,000 people were laid off by Indian start-ups in that quarter. Even though things started looking better after that, the numbers started going up from Q2 2022.
One cannot ignore Byju’s, India’s most valued edtech unicorn, while talking about layoffs in start-ups. The reason is quite apparent. Between October 2022 and June 2023, the company laid off at least 5,000 people. Prior to that, it laid off people from Whitehat Jr and Toppr, the two edtech start-ups it acquired. In Q4 2022 and the first two quarters of 2023, the company accounted for a majority of the start-up layoffs in India.
The September 2023 quarter did not see any layoffs at Byju’s. However, the company may lay off around 3,000-3,500 employees soon, as part of its restructuring exercise. This could take the start-up layoff numbers higher in Q4.
The road ahead
Keeping a few isolated incidents aside, overall, the layoff situation is set to get better, according to Thillai Rajan, Professor, Department of Management Studies, IIT-Madras. “The economy is growing robustly. Capital spending is high, though much of it is coming from the government. This would strengthen employment in the secondary and tertiary sectors,” he says, adding, “with the elections nearing, there would be enough actions to ensure that there are no large-scale layoffs”.
At the same time, an investor who follows the sector closely said that layoffs are part of the start-up culture. “These companies hire more to grow faster and then downsize to optimise cost before the next fund-raise,” he says.