We celebrated India’s Red Letter Day a few weeks ago as it touched a century of unicorn startups.
But things aren’t hunky-dory as they seem.
Lately, the Great Resignation took the pandemic stricken business world by a storm. If the hordes of employees exiting their current positions wasn’t enough, the current trend of ‘volunteer resignations’ *cough* is equally worrying for the business world especially the Indian Startup Ecosystem.
In the past few months, almost 2,594 employees have been laid off across multiple start-ups such as OkCredit, Unacademy, Trell, Blinkit, Meesho, and Furlenco. This month, Healthtech startup MFine sacked 500 people, and edtech Vedantu laid off 424 employees.
Winter Is Coming
Fundings are drying up, and startups are not prepared for a shift to profitability over customer acquisition. The unmanageable expansion has led even well-funded start-ups to downsize their teams. The latest is Cars24, which has laid off 600 employees, citing performance-related issues.
People costs and attrition numbers will continue to soar (21% in 2021-highest since 2003) as long as this Great Resignation trend persists.
Around 86% of India’s professionals will look for new jobs in the next 6 months. Recruiters will have a tough time meeting salary expectations. The fear of possible recession is also lurking in the air.
With the layoffs and a crop of freshers entering the market, spiralling attrition will gradually cool off. The escalating cost of talent acquisition will be curbed to an extent.
Start-up investors also said that the slowing down of capital flows could lead to consolidation and an increase in demand for venture debt.
Too long? Here’s a one-liner: Cars24, Unacademy, Vedantu, and other startups conduct mass layoffs as the Great Resignation continues to hurt startups; attrition and salary expectations rise.