Let the layoff crisis begin: Massive layoffs in the Indian startup sector have affected the workforce to a great extent across India. Since the beginning of the year, we’ve been inundated with headlines about force cuts, job cuts, cost-cutting strategies, and so on. Factors like poor funding position and redundancies in the past few months have made matters worse. There is no stopping Indian startup firms, as more than 24,500 people have been placed in the local start-up sector.
According to AdCounty Media co-founder and CBO, Delphine Varghese, “The Covid-19 pandemic presented a global economic downturn coupled with low consumer demand and unclear market conditions, leading to a wave of layoffs by tech giants around the world. Meta Including, Microsoft, Amazon, Alphabet, etc. According to Layoffs.fyi, over 1.5 lakh employees have been laid off by 553 tech firms. This is evidence enough to support the fact that we will not be relieved of layoffs anytime soon. In fact, the risk of a recession is projected to increase by 50% or more in the coming year.
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Conversely, some believe the winter of layoffs is likely to end in the second half of 2023. While the introduction of artificial intelligence tools such as ChatGPT is expected to reduce human dependence, making a lot of jobs obsolete, rapid digitization could also do the trick. He later added that the increase in demand leads to market correction and creation of vacancies in several sectors, especially BFSI, automobile and FMCG.
Gopalram Suthar, Founder, Furnishell, said, “Since the beginning of 2023, there has been a steady decline in funding for Indian startups. During the last 3 months, Indian entrepreneurs have been affected as they try to access capital in a tough global environment. Over-hiring, cost concerns and finance issues have created new hurdles for businesses as the world emerges from the pandemic period. Layoffs have increased since the first month of 2023. However, these phases are repetitive events and are beyond our understanding. The employment scenario will be better as the country’s economy will grow in the near future, as will normalcy.
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Hariom Seth, Founder and CEO, Find.Inc highlighted, “Due to an uncertain global economy and slowing revenue growth, companies are set to increase the frequency of layoffs in 2023, which will exceed the total of job losses from all tech companies last year. number has been exceeded. , With challenging economic conditions and the threat of a recession, further job cuts seem inevitable. Despite layoffs and a gloomy outlook regarding funding in the last seven to eight months, India’s startup ecosystem hopes for success from a thriving talent pool, supportive venture capitalists and a government focused on facilitating growth. The positive trend is expected to be fueled by several government initiatives designed to bring the startup sector back to pre-pandemic levels, making it important for employees to stay up to date with the latest industry-specific knowledge and technologies. Various factors, including interest rate hikes, India’s monsoon season and consumer demand patterns, will be of key importance in the coming months amid concerns about a global liquidity crunch and a possible economic slowdown.
According to Sahil Arya, Co-Founder and Director, Fat Tiger, “The private sector in India has faced challenging times in recent months. This situation is not limited to startups but established IT services organizations as well. In particular, startups and businesses that are rapidly expanding during the pandemic are facing significant challenges. They are facing both a drop in demand and pressure from investors to improve profit margins. Experts warn that despite the prospect of economic consolidation at the end of the year, pandemic disruption will remain.
Difficult market conditions are expected to continue throughout FY2023. Inflation is unlikely to subside suddenly, and the energy crisis triggered by the Ukraine war will also have consequences. The Indian economy is set to slow down in the first half of 2023, but is expected to recover in the second half along with the global economy. However, India needs to wait for exports and investments to pick up before taking any significant steps. The Indian startup sector is ready for a reset,” he said.
During times of recession, many companies choose to take the direct route of job cuts, citing spending cuts, personnel reductions, acquisitions, buyouts, and the list goes on. This activity has an impact on people’s lives. However, these phases are repetitive in nature and beyond our ability to influence. As Indian GDP grows and general scenario improves, employment scenario will improve