Year-Ender 2023: Byju's, Meesho and Udaan on list of Indian firms that handed pink slips; here are the reasons

Layoffs in 2023: As 2023 is coming to a close, there has been a significant shift in the Indian tech industry, leading to layoffs throughout. Let us take a look at the tech companies that have laid off their employees and the reasons for the downsizing.

In 2023, over 16,000 employees faced layoffs across approximately 100 Indian startups, echoing the challenges of a prolonged funding winter, according to a Mint report. Layoffs.fyi data reveals that Byju's, grappling with financial constraints, terminated 2,500 employees in its second round of layoffs this year. In a determined effort to meet payroll obligations, Byju's founder Byju Raveendran, went to the extent of pledging his home to secure funds for employee salaries.

What were the notable layoffs in 2023?

Meesho

E-commerce website Meesho undertook a third round of layoffs earlier in 2023, firing 15% of workers. The decision was shared by founder and CEO Vidit Aatrey via an email. All the affected employees were promised a month of extra severance pay beyond the notice period as well as ESOPs, irrespective of the period they have been with the company, as Mint reported earlier.

Udaan

B2B e-commerce unicorn Udaan reportedly fired 150 employees, or about 10 per cent of its entire workforce, days after it secured $340 million in capital. Udaan planned to strengthen its supply chain and boost vendor partnerships with fresh funding.

According to a Moneycontrol report, Udaan’s layoffs come because of a fundamental shift in the way it operates. As per the report that quoted sources, the number of laid-off employees could amount to a figure higher than 150 also.

MohallaTech (ShareChat, Moj)

Mohalla Tech Pvt Ltd, which runs the social media platform ShareChat and short video platform Moj, laid off around 20 per cent of its employees due to “external macro factors" impacting the cost and availability of capital, as reported by Mint earlier this year.

Later, in a second round of layoffs this year, Google-backed ShareChat fired about 15 per cent of its workforce as the vernacular social media platform looks to cut costs to turn profitable in the next year and a half. The layoff likely affected around 200 employees across verticals. The platform has a total headcount of over 1,300, according to a report by Financial Express.

Byju's

According to data sourced from Layoffs.fyi, cash-strapped Byju's sacked 2,500 of its staff in the second round this year. The ed-tech startup's founder, Byju Raveendran, pledged his home to raise funds to pay salaries to his employees, as reported by Mint earlier.

Dunzo

Dunzo announced the cut in its workforce by 30 per cent, resulting in almost 300 layoffs. The grocery delivery platform has also secured funding worth $75 million, with Google and Reliance Industries believed to be among the investors, as per media reports.

Swiggy

Swiggy laid off 380 employees across product, engineering and operation divisions, according to Layoff.fyi. The company even shut down its meat marketplace.

ZestMoney

At a town hall meeting, ZestMoney management informed employees that the company would be winding down operations and asked them to seek new jobs as it would only be able to pay their salaries till December 31.

This came after an acquisition deal with PhonePe fell through. The fintech company trimmed its workforce by around 20 per cent as part of its business continuity and survival plans, as reported by Mint earlier.

Ola

According to a report by Inc42, around 200 employees were been handed pink slips as part of the exercise. The report said those laid off were from the parent firm, Ola Cabs, and its subsidiaries, Ola Financial Services Pvt Ltd and Ola Electric.

Coindcx

Crypto exchange CoinDCX laid off around 12 per cent of its workforce, citing changing business priorities and the challenging business environment, founders Sumit Gupta and Neeraj Khandelwal said in a blog post on August 22.

"As you all know, startups and businesses globally are going through challenging times due to tough macro conditions, more so in crypto because of the prolonged bear market and impact of TDS on domestic exchanges. These factors had a significant impact on our volumes and thus revenues," Gupta and Khandelwal said in the blog post.

"To adapt, we undertook several proactive measures, including direct cost optimization and investment in automation to drive efficiency and productivity. We also reprioritized certain initiatives/products in line with our long-term business strategy," they added.

What are the reasons for the layoffs?

Indian startups saw a significant decline in funding in 2023, particularly in late-stage and growth rounds. This funding crunch forced startups to re-evaluate their spending and optimise operations, often leading to layoffs. Additionally, IMF and World Bank reports predicted reduced global growth in 2023, impacting tech spending and profitability.

Many companies over-hired in anticipation of sustained pandemic-driven demand, necessitating workforce adjustments as growth normalised, according to a report "Gartner Digital Labor Market Survey 2023."

How will AI impact job scenario in 2024?

“In 2024, as startups harness the power of GenAI, they are not merely reducing their workforce; rather, they are orchestrating a masterpiece where human ingenuity complements AI ability. This intentional synergy empowers teams to achieve extraordinary wonders, unleashing innovation and efficiency while preserving the irreplaceable touch of human creativity. The key lies in navigating this transformative era with a commitment to cultivating a workforce that adapts, learns, and collaborates seamlessly with the brilliance of artificial intelligence,” said, Sandesha Jaitapkar - CHRO Artha Group.