Startup Layoffs Slow Down But Continue
The wave of layoffs that swept through India’s startup ecosystem in 2023 seems to be subsiding. Data from executive search firm Longhouse Consulting reveals a significant drop in job cuts during the first half of 2024 compared to the same period in 2023. Nearly 11,250 jobs were cut in the first six months of this year, a stark contrast to the 21,000 layoffs in the same period last year.
Hiring Remains Sluggish
While the pace of layoffs has slowed, hiring remains subdued. The number of new hires is still 35-40% lower than the peak in 2021-22. While an improvement over the drastic cuts in 2023, the job market for startups is far from robust.
Challenges Persist
Despite the decline in layoffs, startups continue to face challenges. The need to conserve cash, prepare for IPOs, and ongoing funding uncertainties are keeping companies cautious. Anshuman Das, CEO of Longhouse, believes the worst is over, but the industry is not out of the woods yet.
Major Layoffs in 2024
Several high-profile startups, including Ola Electric, Paytm, Byju’s, Unacademy, Swiggy, and Flipkart, conducted significant layoffs this year. These job cuts highlight the industry’s struggles.
Outlook for the Future
While the frequency of layoffs has decreased, experts believe some companies may still resort to job cuts. Startups are focused on cost optimization and achieving profitability, which could lead to further layoffs, especially in areas like marketing and sales.
The road to recovery for the startup ecosystem is likely to be gradual. While the worst might be behind us, sustained growth and job creation will depend on various factors, including economic conditions, investor sentiment, and the overall business environment.
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