Thousands of techies lose jobs in US, nearly 12,000 in Indian startups: Survey

According to the report, the Indian startup sector may witness more than 60,000 job losses to navigate through the “funding winter”.

Published on: Jul 4, 2022, 10:08:01 IST

By HT News Desk

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About 22,000 workers in the tech and startup sector, along with more than 12,000 in the Indian startup ecosystem, have lost jobs this year as companies which benefited from a pandemic boom are feeling pressure amid economic meltdown, according to Crunchbase. The startups are reportedly finding fundraising much more difficult as their valuations have started to dip in the gloomy environment.

Several unicorns like Ola, Unacademy, Vedantu, Cars24 and Mobile Premier League (MPL) have laid off employees in the name of “restructuring and cost-cutting”. Companies like Blinkit, BYJU's (White Hat Jr, Toppr), FarEye, Trell are among other startup ventures to have shown the door to many employees this year.

According to the report, the Indian startup sector may witness more than 60,000 job losses to navigate through the “funding winter”. Citing industry experts, the report suggests that at least 50,000 startup employees are likely to be fired in 2022 in the name of "restructuring and cost cutting" while certain startups keep receiving millions in fundings.

Global companies like Netflix, financial services company Robinhood and several crypto platforms – battered by the economic headwinds– have trimmed their workforce.

Investors should brace for a historic drop in the stock market to start filtering through to startups over the next few quarters, said a partner of US-based venture capital firm Sapphire Ventures, reported Bloomberg.

“We are going to be in for some hard times ahead -- I don’t know if it’s going to be one quarter, two quarters, three quarters or more,” Cathy Gao said in an interview with Bloomberg Television. “My message to everyone is this is an opportunity to look inwards, get your house in shape and be ready for the future.”

“My stage is a little bit frozen right now because, on one hand, a lot of companies raised a lot of money in 2021 -- they might have 30 months of runway,” Gao said. “On the other hand, investors don’t know where the valuation is going to settle quite just yet.”

(With inputs from agencies)

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HT News Desk
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