Indian technology companies sacked more staff this year than in 2022

Rahul Jain (name changed), a 25-year-old who worked with a digital transformation and automation startup based out of Bengaluru, saw greater job uncertainty lately amid lower funding and the economic downturn.

“In December, when four experienced people were laid off, I lost trust in the company and started looking for jobs immediately,” said Jain. His company skipped paying salaries for a couple of months.

He is no longer working there. And this is not an isolated case.

Indian technology companies have laid off more people this year than they did in 2022.

A total of 14,418 employees have lost their jobs, according to the data from Layoffs.fyi, a website tracking job cuts in the technology sector. This is higher than the 14,224 recorded in 2022.

On average, around 49 employees working in startups lost jobs daily this year. It was fewer than 40 in the previous year.

The data covers largely the startup space, and not necessarily mature technology firms such as in the information technology sector. It collates information about job losses from media reports and categorises them by sector, industry, and place of work. The data is as of October 20.

Nearly 60 per cent of the people laid off were in Bengaluru, the startup hub of the country. Next was Gurugram (16 per cent), followed by Mumbai (11 per cent). Chennai and New Delhi accounted for 3-7 per cent.

Funding has been hit for many startups since 2022, shows the data till September from startup tracker Tracxn.

In the first nine months of this year, startups received $6.2 billion when 13,978 employees were laid off.

In the same period last year, they received $22.7 billion when 8,740 people lost their jobs.

The downturn has affected global players like Microsoft-owned LinkedIn, which announced laying off around 700 employees globally in its second round of job cuts this year.

The United States accounts for nearly 70 per cent of global layoffs, the highest among countries with available data. 

India is second. It is followed by Germany (12,833), Sweden (9,765), the United Kingdom (9,167), 

the Netherlands (8,300), and Canada (4,631). Other countries affected include Brazil, Australia, and China.

Education-technology (ed-tech) firms have been the worst hit. They account for 30 per cent of job cuts in India with 4,360 reported job losses. 

Food companies were next with 2,765 layoffs, followed by retail (1,652), consumer (1,248) and health care (991).

Finance and transportation too has been hit.

The data from Tracxn indicates consumer-based startups received the maximum funding of $2.6 billion in 2023. They were followed by fintech ($2.0 billion), retail ($1.7 billion), and transportation and logistics tech ($1.5 billion).

Ed-tech startups received $0.3 billion.

At $65 billion, India’s ecommerce gross merchandise value (GMV) is 20 times what it was 10 years ago, according to an October 17 Equity Research report from financial services firm Jefferies, authored by equity analyst Vivek Maheshwari and equity associates Jithin John and Kunal Shah.

The growth rate is likely to remain robust, driven by categories like beauty and personal care (BPC), though down from 40 per cent to 20 per cent, according to the report.