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  4. When will Indian startup sector start recovering from layoff crisis? Experts answer

When will Indian startup sector start recovering from layoff crisis? Experts answer

Start up layoff crisis: Some believe that the layoff winter is likely to come to an end in the second half of 2023.

India TV Business Desk Edited By: India TV Business Desk New Delhi Updated on: April 14, 2023 16:00 IST
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Image Source : PIXABAY File Photo for Representation only.

Start up layoff crisis:  Massive layoffs in the Indian startup sector has impacted staff throughout India to a huge extent. Since the beginning of the year, we have been flooded with headlines of reductions in force, job cuts, lowering expenses strategies, and and so forth. Factors like the poor state of funding and redundancies throughout the preceding couple of months have made matters worse. There is no halting redundancies at Indian startup firms, as over roundabout 24,500 people have been laid off in the local start-up sector. 

According to Delphin Varghese, Co-Founder and CBO, AdCounty Media, "The Covid-19 pandemic rendered a looming global economic downturn alongside diminished consumer demand and ambiguous market conditions sparking a layoff wave by tech giants from all over the world. Including Meta, Microsoft, Amazon, Alphabet, etc. According to, over 1.5 lakh employees have been laid off by 553 tech firms. This is evidence enough to support the fact that we might not witness respite from the layoffs anytime soon. In fact, recession risk is anticipated to increase by 50% or more in the coming year.”

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On the contrary, some believe that the layoff winter is likely to come to an end in the second half of 2023. Where penetration of artificial intelligence tools like ChatGPT are expected to reduce human dependency making a lot of jobs obsolete, the rapid digitisation might also trigger a surge in  demand driving market recovery and generating vacancies across several sectors, particularly the BFSI, automobile and FMCG,” he later added

Gopalaram Suthar, Founder of Furniselan, “Since the beginning of 2023, funding for Indian startups has steadily fallen. Over the course of the past 3 months, Indian entrepreneurs have been affected as they try to acquire capital in a difficult global climate. Over-hiring, cost concerns, and finance issues have generated new hurdles for businesses as the globe exits from the epidemic period. Layoffs has risen up since the first month of 2023. These phases, however, are repetitive phenomena and are outside of our grasp. The employment scenario will get better as the nation's economy will  grow in the near future, as will the general condition.”

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Hariom Seth, Founder and CEO, Find.Inc highlighted “In the face of an uncertain global economy and slowing revenue growth, companies have increased the frequency of layoffs in 2023, surpassing the total number of job losses from all tech companies in the previous year. With challenging economic conditions and the threat of recession, further job cuts appear inevitable. Despite the somber outlook regarding layoffs and funding over the past seven to eight months, India's startup ecosystem hopes for success from a thriving talent pool, supportive venture capitalists, and a government focused on facilitating growth. The positive trend is expected to be fueled by several government initiatives designed to return the startup sector to pre-pandemic levels, making it crucial for employees to stay up to date with the latest industry-specific knowledge and technologies. In the midst of a worldwide liquidity crisis and concerns about a potential economic downturn, various factors including the rate of interest hikes, India's monsoon season, and consumer demand patterns will hold significant importance in the coming months".

According to Sahil Arya, Co- Founder and Director at Fat Tiger, “The private sector in India has faced challenging times in recent months. This situation has not been limited to startups alone, but also established IT services organisations. In particular, startups and businesses that rapidly expanded during the pandemic are facing significant challenges. They are experiencing both a decline in demand and pressure from investors to improve profit margins. Experts warn that the pandemic's disruptions will persist despite the potential for economic consolidation later in the year.”

Difficult market conditions are expected to persist throughout FY 2023. Inflation is unlikely to ease suddenly, and the energy crisis resulting from the Ukraine war will also have consequences. The Indian economy has slowed down in the first half of 2023, but it is expected to recover in the second half along with the global economy. However, India needs to wait until exports and investments pick up before making any significant moves. The Indian startup sector is poised for a reset,” he added.

During times of recession, numerous companies opt for to take the straightforward route of job cuts, citing cutting expenses, personnel decrease, acquisitions, buyouts, and the list goes on. This activity has an impact on people's lives. These phases, however, are repetitive in nature and are beyond our ability to influence. As Indian GDP increases and the general scenario improves, the employment scenario will get better

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