Indian tech startups handing out pink slips – and there’s no respite
Everyone kind of knew that it was coming. But nobody seems to have been prepared for the pace and severity with which it is striking. The Covid-19 led lockdown is now starting to take a toll of technology startups in India with large scale job losses being reported each day.
“This is disastrous in every way you look at it. Even companies that looked capable of weathering the storm are falling by the wayside,” says Varun Prasad, a Chennai-based tech startup founder.
According to a recruitment portal, more than 600 businesses have cut staff in the past one month, while a further 660 have cut salaries.
Says another startup director, “I am afraid what we are seeing is only the tip of the iceberg. More news about job losses, pay cuts will emerge in the next 3 months.”
Tough 12 months ahead
The general consensus in the technology startup ecosystem is that in the next 7 to 8 months thousands of jobs will vanish. “It is impossible to put a figure now as the situation is fluid,” Varun says and adds that funding would dry up and there is little hope for buoyancy in demand. Many companies may be forced to close down. “The next 12 months are going to be long and difficult.”
Many internet-based tech companies like Swiggy, Oyo, Treebo, Fab Hotels, Meesho, Fareportal, Capillary, Shuttl, BlackBuck, Acko, have announced job cuts in their respective companies. On an average, 30% of the staff have been pruned in all these companies.
In other companies, pay cuts have been the norm. Salaries have been reduced by as high as 50%. Employees of companies Zoomcar, Livspace, Chaipoint, Ola, Zomato and Cashify would also be taking home lesser salary from next month.
Even biggies not spared
The job cuts are particularly heavy in hospitality, travel, mobility and retail companies. The mayhem seems across the board.
What is worse is that almost all the startups have put a freeze on fresh hiring, and many of them have been forced to go back on the offers they have already made.
Varun says that from what he could gather, all start-ups, irrespective of their size, have been majorly impacted. Early and growth-stage startups of course are bearing the brunt of the collapse.
“The road ahead is long and arduous. It will take at least 18 months for things to get back to even keel,” says Varun.
Away from tech startups, the SME sector is also in huge distress. A published media report suggests that over 100 million people have fallen into unemployment.
And the country has not even come out of the lockdown mode yet. So, things could just be getting worse over the next few months.
Everyone kind of knew that it was coming. But nobody seems to have been prepared for the pace and severity with which it is striking. The Covid-19 led lockdown is now starting to take a toll of technology startups in India with large scale job losses being reported each day. …
