Layoffs in Indian startups cross 25,000 mark since 2022: Report

As a funding winter persists in the Indian Startup ecosystem,
the layoffs wave has been going on since the beginning of 2022. Companies have been undertaking cost cutting measures in an effort to survive.

A report by Moneycontrol says that the number of layoffs in the last year and a half have now crossed the 25,000 mark.

As per Moneycontrol's layoff tracker, from 2022 till date, about 94 startups have laid off close to 25,805 employees in an attempt to reduce expenses and extend their runway to focus on profitability.

Meanwhile, experts believe that layoffs will continue on a much larger scale this year compared to 2022. The Moneycontrol report also mentions that many startups are resorting to silent layoffs and that the actual employees who were sacked might be more.

“If 2022 was a bad year, this is going to be much worse. We are already witnessing funding fall down and I expect that there will be further correction,” Anand Lunia, founding partner at India Quotient - a Mumbai-based VC fund told Moneycontrol.

In 2023, about 46 startups have laid off close to 7,500 employees so far. This is 20% less than last last year's data. About 9,000 employees were let go in 2022 during the same period. While only 50 startups laid off employees last year, the count has already reached 46 in 2023.

“With no sign of funding coming in, the number could potentially go anywhere near 40-50,000 by the end of the year,” told Anshuman Das, co-founder and CEO of Careernet and LONGHOUSE Consulting to Moneycontrol.

Funding to startups plunged to about a fifth in the first five months of 2023 compared to the same period last year. While many startups laid off employees in a cost-cutting effort, some had to let go of employees due to corporate governance lapses by their employers.