2022 Year in Review: Fund-starved startups sacked nearly 18,000 employees this year

Synopsis Edtech companies accounted for a staggering 44% of the total layoffs, according to Longhouse data. ETtech The ongoing ‘funding winter’ and business challenges faced by new age internet companies have resulted in nearly 18,000 job losses so far this year, data compiled by executive search firm Longhouse Consulting showed. The data was shared exclusively with ET.

ETtech In total, 52 startups fired 17,989 employees spread across edtech , consumer services, ecommerce, health tech, logistics, fintech, enterprise tech, media and entertainment, agri-tech and cleantech. Of this, about 44% of the layoffs occurred within 15 edtech companies – Byju’s, Unacademy, Vedantu, Byju’s-owned WhiteHat Jr and Toppr, Practically, FrontRow, Lido, Invact Metaversity, Yellow Class, Teachmint, Lead, Udayy, Crejo. Fun and Eruditus.

ETtech Longhouse reviewed the data with ET and pegged edtech as the sector ranking the highest in the number of layoffs. “Edtech players thought that everything will continue to be digital with Covid-19 getting over. They underestimated the power of the physical.

Second, they didn’t really solve for great learning experiences. Third, they did not use the money wisely to do a blended product of what was called a physical education,” Anshuman Das, managing partner at Longhouse Consulting, told ET. Discover the stories of your interest Blockchain 5 Stories Cyber-safety 7 Stories Fintech 9 Stories E-comm 9 Stories ML 8 Stories Edtech 6 Stories Edtech companies over-indexed on digital, over-hired, and did not build deeper products to create solid and long-lasting engagement with students.

Therefore, they had to fire employees, Das added. Some of the layoffs were, however, part of a clean-up process, he added. “Consumers are moving back to the physical world.

Companies like Flipkart , while not greatly positioned to get offline business, also did not over-hire because they are fairly mature,” he said. During the first part of the year, most layoffs were concentrated on non-tech roles such as operations, academic and feet on street sales. But of late, a lot of the tech-focussed employees at startups such as Swiggy and Ola have also been let go, Das said.

SoftBank-backed Ola fired 2,300 contractual employees in 2022, as per the dataset. Most of these happened at the Bengaluru-based company’s call centre department, a person in the know told ET. ETtech ET reported in July that Ola was in the process of firing close to 1,000 employees even as it ramped up hiring for its electric mobility business.

Startups like Cars24, Meesho, Clear (formerly ClearTax), Furlenco, Oyo Hotels & Homes, and others fired a part of their total workforce during 2022. Many of these firms cut back on teams within a few months of raising fresh capital as they realised that the funding taps were starting to go dry. ET reported on December 27, citing its State of Startups survey, that over 65% of startup industry participants said they would still opt for more job cuts to conserve cash in 2023.

Don’t miss out on ET Prime stories! Get your daily dose of business updates on WhatsApp. click here! Tuesday, 27 Dec, 2022 Experience Your Economic Times Newspaper, The Digital Way! Read Complete Print Edition » Front Page Pure Politics Companies ET Markets More Startups’ New Year Mantra: Cut Cash Burn, Turn Profitable Conserve cash, cut burn and turn profitable. This was the common refrain among India’s top founders, investors and internet executives in ET’s annual State of Startups survey.

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