The Indian start-up ecosystem has been witnessing major upheavals this year. A drop in venture capital and (VC) and private equity (PE) funding has been leading start-up enterprises to cut down employee bandwidth to keep their business on the profitability track. According to an Economic Times report, nearly 18,000 employees lost their jobs from start-ups since the beginning of this year.
Amongst sectors, edtech has been hit brutally. Fifteen companies from this field conducted 44 per cent of the total layoffs. Highly-valued unicorns like Byju’s, Unacademy and Vedantu terminated employees to keep the cost in check.
For instance, Byju’s announced its plans to rationalise five per cent of its 50,000-strong employee bandwidth in October. In April, Unacademy, another unicorn, fired nearly 1,100 workers. Recently, Bengaluru-based Vedantu laid off 350 employees.
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“Edtech players thought that everything would 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, the managing partner (MP) at Longhouse Consulting, told The Economic Times.
Along with edtech companies, e-commerce giants like Udaan and online hotel aggregator OYO also fired several employees. The Softbank-backed Indian enterprise announced cutting 600 jobs in December as a part of the company restructuring process. Udaan terminated 350 employees in November.
Indian start-ups also witnessed a round of exits of senior executives along with layoffs. For instance, BharatPe, the Delhi-based fintech giant, saw co-founders Satyam Nathani and Bhavik Koladiya quit. Several senior Meta India executives like Abhijit Bose, the WhatsApp India chief, Vinay Choletti, head of WhatsApp Pay India, Ajit Mohan, head of Meta India and Rajiv Agarwal, the public policy director of Meta India, resigned from their posts.
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