Active Stocks
Tue Apr 16 2024 15:59:30
  1. Tata Steel share price
  2. 160.05 -0.53%
  1. Infosys share price
  2. 1,414.75 -3.65%
  1. NTPC share price
  2. 359.40 -0.54%
  1. State Bank Of India share price
  2. 751.90 -0.65%
  1. HDFC Bank share price
  2. 1,509.40 0.97%
Business News/ Companies / Start-ups/  Startups dial outplacement services as layoffs loom

Startups dial outplacement services as layoffs loom

As many as 7,000-8,000 startup employees have lost their jobs across verticals in 2022 so far

These are tough times for employees who are suddenly finding themselves without a job. representational/mintPremium
These are tough times for employees who are suddenly finding themselves without a job. representational/mint

Indian startups are dialling outplacement firms to help retrenched employees secure a job. In the past few months, several startups sought assistance from professionals to help former employees who were laid off to prepare them and even draft their resumes to secure a job, according to outplacement firms.

This underscores the tough times for employees who are suddenly finding themselves without a job, with venture capital funding drying up as investors turn cautious due to the volatile financial markets and geopolitical tensions.

“Startups impacting employees have reached out to us. We anticipate more enquiries for support from this sector in the coming months in line with the current funding conditions," said Joel Paul, managing director, Asia-Pacific and Middle East and Africa, at recruitment firm Randstad Risesmart. “There has been an increase in enquiries and consulting support over the last 4-8 weeks in the Indian market, which is consistent with the current disruptions in the startup ecosystem," he added.

So far in 2022, 7,000-8,000 startup employees, primarily junior and mid-management staff lost their jobs across verticals such as administration, teaching, sales and marketing, and support staff. Mint reported on 16 May that startups may lay off another 5,000 employees over the next few quarters due to the rising pressure from investors to improve profitability and to increase focus on their core businesses.

Outplacement agencies help laid off staff with resumes, besides connecting them to prospective employers “Companies are engaging us to support candidates who have been retrenched with coaching, branding and marketing of their profiles," Paul said in an interview.

On the other hand, over the last two quarters, outplacement firms have also seen strong demand from companies that are expanding their workforce. A spurt in economic activity after the covid-induced disruptions has led to a hiring frenzy across sectors like information technology (IT), IT enabled services (ITes), and startups.

“We have asked our outplacement team to get ready and get in touch with all clients to understand their requirements. The main flux of demand had come in during the pandemic and then had eased out. Now, we are preparing again," said Shiv Agrawal, managing director of recruitment firm ABC Consultants.

However, outplacement firms said despite the hiring frenzy, it is not easy to find jobs for those who were laid off. “The profiles in demand are not for the ones who were retrenched. IT sector, for instance, is looking for skill sets in coding, Java and Python but will not be on the lookout for sales and marketing profiles," said the head of an outplacement company seeking anonymity.

Typically , outplacement services are used by multinational firms, where the workers are given an option to avail the services of outplacement firms, and the company bears the cost of services.

“The pandemic had a catastrophic impact on the economy, which led to a significant rise in demand for outplacement service, driven by employers who chose to be sensitive towards the damage it did to outgoing employees," said Hardeep Singh, president of Right Management India Pvt. Ltd, the consulting arm of recruitment firm Manpower Group.

“With the uptick in the business environment, we see the outplacement part of our business stabilizing at pre-pandemic levels. Currently, demand for outplacement is driven by strategic priorities of clients and job redundancy, primarily from the energy, pharmaceutical and banking, financial services and insurance (BFSI) sectors globally," Singh added.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Devina Sengupta
Devina tracks and writes on workplaces, human resources and education for Mint. She also occaisionally writes an opinion column. She hosts a podcast on interesting HR trends in corporate India called The Working Life.
Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 31 May 2022, 12:51 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App