Out of the 1,200 engineers that Infosys onboarded in October and November, 40 to 45 more trainees were let go after the company came under fire for firing about 400 trainees who didn’t perform well in its rigorous assessment. An important internal evaluation that Infosys had planned for February 18 at its Mysore campus was indefinitely postponed. Following the company’s decision to fire hundreds of trainees, which sparked outrage from labour unions and prompted government action. According to reports, the evaluation was originally scheduled to include about 800 workers, with results anticipated by February 19, 2025, and possible terminations by February 21. On March 18, the IT services company evaluated these engineers. To give the trainees enough time to get ready, the evaluation was rescheduled. They were also given access to mock exams for improved preparation and sessions to address any questions. At least 45 fresher were told after the test that they had failed the basic skills program because they did not satisfy the requirements to be eligible and did not match Infosys standards.
Mandatory Signing of Separation and General Release Agreement
According to reports, the trainees would get a month’s salary and a letter of release after signing a Separation and General Release Agreement. It has been stated that outplacement support has been promised to the impacted trainees while they look for other employment. The affected trainees have reportedly been offered 12 weeks of external training by Infosys to get them ready for careers in the BPM industry. They can then apply for Infosys’ BPM if they successfully complete the course.
Earlier, Infosys Terminated 400
About 400 trainees were let go by Infosys at its Mysore facility earlier in February after failing to pass required internal tests. Many of them were left feeling distressed and told to leave the area right away. According to a media outlet, trainees who had waited two and a half years to join the organisation after obtaining their offer letters in 2022 were impacted by the mass termination that occurred on February 7. As per an official statement given to a news agency, the corporation justified its actions by stating that all new hires have three chances to pass the test; if they don’t, they won’t be allowed to stay with the company. The corporation claims that the procedure has been in place for more than 20 years and that it is also included in their contract. Starting at 9:30 AM, groups of 50 trainees were brought in with their laptops to begin the methodical terminations. According to a media report, bouncers and security guards were on hand during the event.
As part of a global staff reduction initiative, American aircraft manufacturer Boeing sacked over 180 workers at its engineering technology centre in Bengaluru, Karnataka, according to a media agency. India is a significant market for Boeing, where the corporation employs about 7,000 people. Up to 180 employees at the Boeing India Engineering Technology Centre in Bengaluru were let go in the December quarter of 2024. Boeing did not issue a formal statement till now.
No Negative Effect on Activities
According to the agency’s assessment, strategic changes were made that affected a small number of personnel without having a negative effect on government operations or customers. According to the report, some jobs were eliminated and some new ones were added. Reductions in India were more measured and clearly focused on upholding safety, quality, and customer service requirements. Complex, cutting-edge aerospace work is done at the Boeing India Engineering & Technology Centre (BIETC) in Bengaluru and Chennai. One of the company’s biggest investments outside of the United States is its engineering and technology campus in Bengaluru, which it owns entirely. According to its website, Boeing sources over $1.25 billion a year from a network of over 300 suppliers in India.
According to the company’s website, Boeing still sources about $1.25 billion a year from a network of more than 300 suppliers in India, making it a significant market. Complex and cutting-edge aircraft engineering work is handled by BIETC’s Bengaluru and Chennai locations. One of Boeing’s biggest investments outside of the US is its engineering and technology campus in Bengaluru, which it owns entirely.
India’s Civil Aviation Sector
The International Air Transport Association (IATA) predicts that by 2030, India will surpass China and the United States as the world’s third-largest air passenger market. Additionally, according to the India Brand Equity Foundation (IBEF), a division of the Department of Commerce, Ministry of Commerce and Industry, the number of aircraft operating in the sector has increased due to the growing demand in the industry. By 2027, it is anticipated that there will be 1,100 aircraft. There were 196.91 million passengers (including domestic and international) in FY25 (till September 2024). In FY25 (as of June 2024), Indian airports reported 81 million domestic passengers, a 5.6% YoY increase, and 18.54 million overseas passengers, a 14.2% YoY increase, compared to the same period the previous year.
In FY24, Indian airports reported that domestic passenger traffic was 306.79 million, up 13.5% year-over-year, while foreign passenger traffic was 69.64 million, up 22.3% year-over-year. Comparing April-September 2024 to the same period the year before, domestic passenger traffic increased by 7.4% to 160 million, while foreign passenger traffic increased by 11.2% to 36.96 million. ICRA stated on December 19, 2023, that revenue growth for the Indian aviation sector is expected to be 15-20% in FY24 and 10-15% in FY25.
By early 2025, Amazon plans to let off 14,000 administrative staff members as part of a comprehensive restructuring strategy meant to boost productivity and cut expenses. It is anticipated that Amazon will save between $2.1 billion and $3.6 billion a year as a result of the decision, which represents a 13% drop in the company’s global management personnel. Following recent layoffs in Amazon’s sustainability and communications departments, this most recent round of layoffs represents a larger change in the company’s corporate structure. The choice is in keeping with CEO Andy Jassy’s continuous attempts to reduce organisational complexity and streamline processes. In an effort to improve operational efficiency and speed up decision-making, Amazon intends to raise the proportion of individual contributors to managers by at least 15% by the first quarter of 2025. Jassy has been outspoken about cutting back on bureaucratic layers that impede operations, according to sources Business Insider reported. This supports his goal of having Amazon operate more like a quick-thinking company.
Amazon Restructuring its Work Operations
In order to facilitate this new change, Amazon has implemented a new “bureaucracy tipline” that enables staff members to report organisational inefficiencies. In order to save expenses, managers have also been instructed to limit senior hiring, increase the number of direct reports, and reevaluate pay structures. These actions are a part of a larger effort to retain Amazon’s intense focus on profitability while establishing a leaner corporate structure. During the pandemic, Amazon’s employment increased quickly, from 798,000 workers in 2019 to over 1.6 million by the end of 2021. However, the business started adjusting its staffing levels when customer demand levelled out. In an attempt to reduce costs, Amazon has already let go of 27,000 workers during the last two years, most of whom were in corporate positions. It employed almost 1.5 million people worldwide by the end of 2024, including 350,000 corporate staff and more than a million frontline workers in delivery and warehousing operations. However, the most recent layoffs represent a dramatic change in strategy, focusing on managers rather than entry- or mid-level workers.
Reason for Layoffs
The reorganisation coincides with mounting financial strains, such as heightened investor monitoring and a cutthroat e-commerce environment that necessitates greater efficiency. According to analysts, Amazon’s growing dependence on automation and artificial intelligence has also lessened the need for traditional administrative oversight, increasing the replaceable nature of middle-management positions. Additionally, there have been rumours that Amazon is promoting voluntary attrition as part of its personnel reduction strategy in response to its new return-to-office mandate. Amazon has already started implementing the layoffs in stages. The North American Stores segment laid off 200 employees in January 2025, and the communications and sustainability departments also saw layoffs. According to a Morgan Stanley report from late 2024, Amazon’s reorganisation would eventually result in the elimination of about 14,000 managerial positions, which would change the company’s leadership dynamics and result in considerable cost savings.
Mukesh Ambani and his daughter Isha Ambani are reportedly considering job and cost reductions as sales of Reliance Retail declines sharply. This includes reducing marketing expenditures, postponing the opening of new stores, combining Reliance Brands Ltd. with the bigger retail company, and reevaluating international brand alliances. Additionally, higher-paying staff will only be employed with the chairman’s office’s consent. According to a media agency, Reliance Retail is concerned about a slowdown in sales after brokers valued the company at only $50 billion, half of what it was worth when it raised capital two years ago.
Cutting Down on Expenses
According to the media agency’s claim, which cited company documents, Reliance Retail reduced the number of new stores it opened and laid off 38,000 workers in 2024. The business also reduced marketing expenditures on its web platform called Ajio. Recruiting staff members making more than $22,890 a year now requires direct approval from Ambani’s office as of October. Even hiring more employees than the authorised plan requires permission from V. Subramaniam, Managing Director of Reliance Retail. Previously, lower-level supervisors were in charge of making these choices. The report further states that these changes are an attempt to demonstrate to investors that the business is progressing, particularly in light of the fact that last year a number of brokerages, including Sanford C. Bernstein and Kotak Institutional Equities, reduced its valuation.
Decline in Sales in Retail Sector
Sales growth in organised retail categories like clothing, footwear, cosmetics, and QSR fell to a mid-single digit last year, down from 15% in 2022, according to the Retailers Association of India (RAI). The majority of merchants consequently shut down a number of unprofitable locations; this trend is anticipated to continue as businesses look to increase profitability. Businesses attribute the slowdown in spending to a number of causes, including high food inflation, low pay increases, consumer debt, a sluggish pace of job creation, and rising housing costs and rental prices. At the same time, prices continued to rise, particularly for real estate.Since these leases are long-term—seven to nine years—and corporations were hesitant to sign them, the market saw rental prices sort of soar following FY23 and the COVID boost.
As a result, most of the companies chose to slow down. Simply hitting a number and signing a document that will later come back to haunt the company is not a sensible course of action. Kaushal Parekh, chief financial officer at Metro Brands, elaborated on that point by saying that the market is currently witnessing a minor falling off in terms of rental expectations. Players are thus given the chance to press the paddle. Additionally, businesses have consistently stated that you may notice retailers moving a little more slowly when there is excessive market enthusiasm. Additionally, businesses will endeavour to promote the greatest rental deals when they observe the market getting a little more pessimistic and the environment improving.
According to a media agency, Ola Electric Mobility Ltd., under the leadership of Bhavish Aggarwal, is laying off over 1,000 staff and contract workers in an attempt to reduce the company’s growing losses. As the electric two-wheeler (2W) manufacturer goes through a significant reorganisation, the employment cutbacks impact several departments, including procurement, fulfilment, customer relations, and charging infrastructure. In less than five months, this is the company’s second round of layoffs. About 500 workers were let go by Ola Electric in November 2024, and the most recent round of layoffs represents more than 25% of the company’s 4,000-person employment as of March 2024. However, since they are not included in the company’s formal disclosures, contract workers are not included in this statistic.
Ola Grappling with Multiple Challenges
A representative for the company told the media outlet that Ola had automated front-end processes to boost customer satisfaction, cut expenses, and increase margins while removing unnecessary positions to increase efficiency. They did not, however, state how many employees were impacted. The layoffs occur as Ola Electric, which is supported by SoftBank, faces several difficulties. In the December 2024 quarter, the company’s net loss increased to INR 564 crore from INR 376 crore in the same period the year before. The business has also had to contend with increasing competition, which has caused it to lose its top spot as India’s largest seller of electric scooters. According to government data from December 2024, TVS Motor Co. and Bajaj Auto Ltd. both surpassed Ola Electric as the market leaders. Ola Electric argues that it is still a major player in spite of these failures. The business recorded sales of more than 25,000 units in February 2025, gaining a 28% market share. Aggarwal had set a monthly sales goal of 50,000 units to reach breakeven in earnings before interest, tax, depreciation, and amortisation (EBITDA), but this is well below that amount.
Revamping Plans
In order to reduce expenses, Ola is reorganising its delivery and logistics plans and automating some of its customer service functions. At its showrooms and service centres, workers in sales, service, and warehouse positions are also being let go. To solve issues with accessibility and service, Ola Electric opened 3,200 retail locations nationwide in December 2024 as part of an ambitious expansion. This action was taken in response to a spike in consumer complaints about poor product and service quality. According to some sources, up to 80,000 complaints were sent to Ola Electric each month. Delays in the supply chain have also been a problem for the business. In an effort to reduce expenses and increase efficiency, it renegotiated contracts with two significant vendors earlier this year, alerting investors that this will have an impact on vehicle registrations in February 2025.
Amid a severe liquidity constraint, the domestic quick-grocery delivery service Dunzo is reportedly laying off at least “150-200” additional staff. The company is planning to raise $35 million in capital from existing supporters such as Reliance Industries and Google in addition to new investors. There have been various reports that indicate that Dunzo is likely to reduce its employment by approximately thirty to forty percent or more.
There have been reports that the corporation has informed the affected employees that they will receive their complete and final settlements in January. A brief meeting was held to officially tell the staff members of the most recent round of layoffs. Between the two waves of job cuts that have taken place so far this year, the startup has already terminated approximately 400 employees.
Delay in Salaries
In a continuous shortage of funds, Dunzo decided to postpone the payment of salaries to its staff members for June and July until November.
Kabeer Biswas, the co-founder and CEO of the business, has stated that the company may also consider closing its office in Bengaluru to save expenses. According to reports, Biswas informed the staff that their outstanding payouts for June and July will now be cleared in November.
Earlier, Dunzo postponed the payment of salary until the first week of October because it was unable to raise sufficient funds. Additionally, it had committed to paying employees a 12% annual interest rate on the salary component that it had withheld from June. A total of around $300 million has been brought in by the company since the beginning of 2022, bringing the total amount raised to nearly $500 million.
About Dunzo
Dunzo is an Indian on-demand delivery service that focuses on providing local food. With low delivery prices, it delivers anything and everything as needed. If a person happens to leave some important documents at home, Dunzo can deliver them to his workplace. Apart from that, Dunzo can go shopping for individuals if they are ever in a jam and can’t make it to the mall to buy a t-shirt.
There are several eateries, apparel boutiques, and general merchandise establishments that Dunzo has partnered with. At this time, it is offering its services in Bengaluru, Delhi, Gurugram, Pune, Chennai, Mumbai, Jaipur, Noida, and Hyderabad. Startup Dunzo provides a hyper-local demand delivery service; its parent business is Dunzo Digital Private Limited. It is registered with the Registrar of Companies in Bangalore, where it was established on July 8th, 2014 through incorporation.
To increase its profitability, the agriculture supply chain company Waycool has terminated the employment of more than two hundred people across all departments. This is the third wave of layoffs that have been implemented at the corporation situated in Chennai.
Waycool’s businesses are all working hard to put their strategies into action to achieve profitability. A further simplification and automation of roles and structures is included as a component of this. A spokeswoman for Waycool stated that this will be an ongoing procedure at all times.
There was no statement from the corporation regarding the number of employees who were terminated. A total of more than 370 workers were terminated from their positions during the two previous firings, which took place in July 2023 and February of this year respectively.
According to a well-known media outlet, which was the first to report on the news, the layoffs have affected employees in the cities of Chennai, Bengaluru, and Hyderabad, as well as staff working for the company’s two subsidiaries, CensaNext and BrandNext.
Why Did the Company Decide to Initiate This Move?
Waycool was reportedly in the process of negotiating a new round of funding on the order of more than fifty million dollars, which would have resulted in the company’s valuation being in the range of $900 million to $1 billion. The negotiations, on the other hand, did not succeed. The company’s most recent stock round resulted in a valuation of $700 million.
It is estimated that Waycool has received approximately $160 million in investment at this point from a variety of sources, including Lightrock, International Finance Corporation, FMO, and 57 Stars.
Several headlines in the media earlier this week brought attention to the fact that Waycool was having difficulty scaling and was unable to acquire a fresh round of funding. Even though the company has not yet submitted its annual report for the fiscal year 24 (FY24), it has reported a 62% increase in its operational revenue, which went from INR 772 crore in FY22 to INR 1,251 crore in FY23. The company continued to suffer losses, which increased by 89% to a total of INR 685 crore in the fiscal year 23.
Delayed Payment Hampers Brand Name
The situation has become worse as a result of unfulfilled payment obligations to various vendors, such as millers, logistics partners, and service providers such as SGSs. A report in the media stated that payments to vendors were made rotationallyover the previous three months; however, this practice has completely ceased since June because collections from customers have been delayed.
Several times in the past, salaries have been delayed, and the employer has not yet processed the payslip for June. As a result of the drought of funding, the payments from customers have become stalled, as mentioned in a media report.
The discipline of computer science first emerged in the late 1950s and consistent and constant research and upgrades resulted in the advent of the World Wide Web as the world entered the new era of the internet. The revolutionary effect of emerging technology on culture and commerce included near-instant communication by electronic mail, instant messaging, voice-over-internet protocol (VoIP), video chats, discussion forums, blogs, social networking sites, and online shopping sites. The importance of this technology was felt in the nineties as many companies sprang up with business ideas around technology.
It was after the 2000 dot-com bubble crash that these technology companies thrived and grew to dominate the market with little regulation. The year 2013 was when the term ‘Big Technology’ entered into mass consciousness. ‘Big Tech’ became popular in the year 2017 due to the investigation into the role that technology companies played in the 2016 United States elections. The term also refers to the tech giants that currently dominate the global tech market. These are the five largest American tech companies – Alphabet, Amazon, Apple, Meta, and Microsoft. These companies are also called the ‘Big Five’.
These companies are leading players in their respective technology fields that range from artificial intelligence, cloud computing, consumer electronics, e-commerce, home automation, online advertising, self-driving cars, social networking, software, and streaming media. With a market capitalization of anywhere between USD 1 trillion to USD 3 trillion these companies are among the most prestigious employers in the world.
Sudden Growth Spurt and Over Hiring
The technology industry has seen unprecedented growth in the last three decades increased multi-fold during the global covid-19 pandemic. Global lockdowns forced companies to overnight scale up their remote working options and find effective alternatives to in-person meetings and conferences. This resulted in tech companies responding with quick over-hiring as product needs evolved rapidly.
Examples of such quick responses to product needs by different businesses include Google, which changed its video conferencing platform Google Meet to accommodate more participants, and Meta changed Whatsapp’s video conferencing facility. These changes required specialized manpower that included product managers, developers, UI/UX designers, etc leading to companies hiring additional staff. Unfortunately, these companies foresaw such a high demand continuing and went on a hiring spree that led to over-hiring.
Sunder Pichai wrote in his letter that he sent to employees after he announced the termination of 12,000 employees – “Over the past two years we’ve seen periods of dramatic growth. To match and fuel that growth, we hired for a different economic reality than the one we face today.”
The Current Reality
The tech industry has seen more than 200,000 job cuts, since the beginning of 2022, a majority of which have come from the ‘big five’. The one major reason being cited for these layoffs has been theslowdown of the global economy and the impending threat of a recession. Of course, over-hiring during the boom has also caused companies to downsize in order to maintain the company’s bottom line during this slowdown.
Fund managers and early investors in successful technology companies also increase pressure to make quick and productive decisions to counter the slowing economy. Altimeter Capital, one of the investors in Mark Zuckerberg’s Meta wrote a letter to Zuckerberg stating – “Like many other companies in a zero-rate world – Meta has drifted into the land of excess – too many people, too many ideas – too little urgency. This lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes.” Similarly, Sunder Pichai received a letter from the Founder and CEO of TCI Fund Management, Christopher Hohn stating – “I believe the management should aim to reduce headcount to around 150,000, which is in line with Alphabet’s headcount at the end of 2021. This would require a total headcount reduction in the order of 20%.”
Another big reason is that many investments into new initiatives are proving to be unprofitable. Some examples include Amazon’s robotics division, Microsoft’s virtual reality and metaverse division AltspaceVR and Meta’s Substack competitor called Bulletin.
CIO of Bridgewater Associates, Ray Dalio said – “What’s happening is that a number of these investments by big techs have negative cash flows. That means that they didn’t have earnings that will support those prices. And in many cases, they just didn’t have earnings. And they relied on either borrowing money to make up the gap or raising venture capital or private equity money.”
Dan Ives, MD of Wedbush Securities, an investment firm, further clarified – “Big Tech has been having fun up to this point but clearly they are going to see significant cost cuts, headcount cuts as well. I think over the next six to nine months as the recession is at the doorstep, time will get tough. I think this dark storm will pass but you cannot think of these tech companies as isolated from this. I think there’ll be a massive rip in them as well.”
What do these Layoffs Mean?
Even though tech layoffs have been dominating news headlines recently, the US economy has added 223,000 jobs. Even though Microsoft laid off 10,000 employees, they have, since 2019, added almost 80,000 jobs. Amazon hired 300,000 people last year, even as they laid off 18,000 employees.
What this essentially means is that the tech sector is maturing and now hiring people who can help improve the business’s bottom line. Tech businesses are reducing engineering and operational roles while reallocating their hiring budget to business-related roles that focus on maintaining healthy cash flows for the company.
Conclusion
Although it is likely that tech lay-offs will continue in 2023, the sector is growing and many companies within the sector will continue to hire. It might be to an employee’s benefit to invest in personal and professional growth and narrow efforts towards opening opportunities with the growing companies.
FAQs
Are tech companies laying off?
More than 106,000 workers in U.S.-based tech companies (or tech companies with a large U.S. workforce) have been laid off in mass job cuts so far in 2023.
Which tech sectors are laying off?
In 2023, the workforce reductions have been driven by the biggest names in tech like Google, Amazon, Microsoft, and Meta.
Why is the tech industry laying off?
There are several factors contributing to tech layoffs, including the economy, inflation, higher interest rates, and overhiring.
This article has been contributed by Sridhar Laxman, Executive Coach, Lucid Minds Coaching.
Layoffs, terminations, downsizing, and reorganization is a challenging and complex processes.
Companies hire employees when the business demand is high, cash flows are healthy, and the external environment is favorable for a quick and sustained expansion.
However, uncertainty is a given in life, just like everything else. Even the most accurate projections and company plans are often contested and abandoned during difficult times.
Most times, macro environments influence organizations to explore their ability or inability to retain employees. However, with the decision comes the responsibility to effectively communicate and manage the process of layoffs.
Communication becomes crucial during layoffs. Layoffs impact multiple stakeholders differently, Not only do the employees who are asked to leave get affected but the remaining employees across geographies also face anxiety, stress, and confusion.
From the moment the decision is made until the last identified employee hears it, communication plays a crucial and active role in the entire process.
Below are 8 ways that will help businesses handle communication amid layoffs compassionately and efficiently.
Develop a crisis communication plan even before the need arises. We live in a dynamic world with constant disruptions. The longevity of any organization is constantly challenged today because of the unprecedented times we live in.
Be Comprehensive
Ensure the crisis communication plan addresses and supports the needs of all stakeholders, not just the impacted employees. The crisis communication plan needs to address all stakeholders including employees, customers, vendors, and investors.
Be Guided by Values
Adhere to values while decision-making. This will bring clarity to what’s essential and reduce noise and distractions. Taking a value-driven approach to building the actual piece of communication can ensure real needs of stakeholders are met and addressed objectively.
Be Compassionate
Be compassionate in your written and verbal communication. Layoffs are not just about reducing roles; they impact the livelihoods, health, and well-being of employees and their families. Respect and dignity are compromised, which leaves the opportunity for fear, anxiety, and a feeling of helplessness to take over.
Therefore, communication must be thought through and designed to be genuinely compassionate and empathetic. Every effort should be made to lessen the impact of the unfortunate development.
Be Supportive
The plan needs to support the livelihood of those impacted. No matter how courteous your message is, it must also offer assistance to people who are affected.
In addition to compensation, companies should also provide other forms of psychological support.
For instance, businesses could provide employees with the various types of support outlined below to help them cope with the situation.
Access to a Counsellor or a Coach at no cost.
Access to relevant courses, skills, and career advancement material.
Contact details of reputed head hunters, and recruitment firms.
Links to open opportunities within group companies, and allied industries.
Free access to ebooks and audiobooks for a few months.
Links to consulting and vendor services required by the firm.
Letters of acknowledgment, and recommendations for future employers.
Be Clear and Patient
Layoffs are complicated; there’s no denying the harshness of the experience; companies could soften the impact by presenting the information in a clear, transparent, and patient manner instead of harsh or vague.
Impacted employees will have numerous questions, concerns, and clarifications; they will have worries and anxieties. Communicating clearly and ensuring questions get answered will reduce the pressure felt by impacted employees.
Be Mindful
During layoffs, legal counsel will have an approach of keeping the organization’s best interests in mind. It’s neither unfair nor wrong; it is what it is. However, communication designed mindfully can balance the need for risk mitigation with much-needed compassion and empathy.
Be Alert
In an age of fake stories and deliberate misinformation, unethical competition can run smear campaigns to discredit the organization.
Preemptive, proactive communication of facts and accurate information can prevent confusion and reduce the extent of the damage caused by misinformed campaigns.
Despite all of the above, layoffs still cause pain and suffering. This is a business decision that is made in the absence of other alternatives.
Layoffs not only impact employees but also other stakeholders of the company such as the customers, vendors, and investors.
In a layoff scenario, customers are more likely to be concerned about the service quality and contract fulfillment whereas, the vendors would need clarity on whom to interact with to continue serving the company.
In contrast, company investors are more likely to be anxious about the impact layoffs would have on their investments and returns. Similarly, potential company investors would tread cautiously and may withhold their investment decision.
However, communication is essential to maintaining corporate confidence in all of the above instances. With concise and clear communication, a business may influence how the many impacted stakeholders perceive, consider, and respond to the decision.
Organizations should therefore spend more time planning their communication to support individuals affected in a kind and compassionate way.
Generally, most companies follow email as the main communication channel for conveying layoffs.
How layoffs will be communicated with the individual as well as within the company?
The best way to communicate about layoffs with individuals as well as with the company is to organize a meeting at the individual level followed by a unit-level meeting.
How do you manage a team in layoffs?
During or after layoffs, managing a team is a bit of a challenge, well communication and motivating them is the key. Identify gaps between teams and avoid over-work.
A layoff is an involuntary separation from work through no fault of the employees. It is initiated by the employer for economic or business reasons. The global break-out of the Covid-19 pandemic spelt a disaster for the economy as 2020 saw severe lockdown restrictions for more than half the year.
Hence, unfortunately, it came as no surprise when companies – startups as well as large corporations – laid off staff in a bid to save their business operations from folding. The grim economic scenario of that year saw as many as 12,951 startup employees lose their jobs in India.
Why Layoffs in Google, Apple, Microsoft, and Twitter Could Be Good for India?
Layoff Statistics
Number of Employees Laid Off by Indian Startups as of June 2022
Global statistics reveal that since April 1, 2022, more than 43,000 employees from 342 startups and tech companies have been laid off worldwide out of which 13% are from India. Employees of big tech companies like Microsoft and Meta have also not been insulated against job loss.
Since the beginning of the pandemic, India has seen more than 25,000 employees lose their jobs and more than 11,500 employees have been fired this year. This unfortunate scenario has been dominated by ed-tech platforms like Unacademy which has laid off 1,150 employees, BYJU’S which has laid off 550 employees, and Vedantu, which has laid off 624 employees. In fact, two ed-tech companies, Udayy and Lido Learning, have closed their doors completely.
Among other sectors, ride-hailing platform, Ola laid off close to 500 employees, MFine, the healthcare startup laid off 600 employees, and pre-owned cars platform Cars24 laid off 600 employees. Other Indian startups and unicorns that have laid off employees are Meesho, MPL, Innovaccer, LEAD, Trell and Blinkit (now owned by Zomato).
Reasons for the Layoffs in Startups
Reasons for the Layoffs in Startups
The year of 2022 has been rocky for the public and private sector equity market. Stock markets across the world reacted negatively and plummeted due to the global sell-off pressure. This impacted the new age tech stock as listed startups struggled. This was followed by the fall in the private markets as well.
India is the third largest startup ecosystem in the world in terms of unicorn companies created. 2021 was the year when the startups experienced soaring valuations which slowly dropped and began experiencing a cash crunch this year as investors became wary of higher startup valuations.
This led to a funding crunch and by the second quarter of 2022 Indian startups were able to raise only USD 6.83 billion. This was down by 42% from USD 11.83 billion which was raised in the first quarter of 2022.
By July 2022, Indian startup funding had reached its lowest in over 17 months as the total startup funding value stood at only USD 1.16 billion, further dropping to USD 1.1 billion in August 2022. Investors took on the role of advisors to startups, giving instructions on survival techniques. There were various reasons that led to startups laying off their employees in quick succession.
Cost Reduction
As funding resources dried up, startups found it difficult to sustain existing business operations, much less expand. Compounding this was the slow market that was affecting sales figures, impacting the company’s profits.
Staff Redundancy
Companies underwent modifications, often merging internal functions or even shrinking business operations. This led to positions being scrapped, leading to staffing redundancies.
Relocation
Many companies either shifted business operations areas or even shut down some business locations. This led to massive employee layoffs, affecting the economy of the community.
Mergers and Buyouts
Many startups, which showed promise in terms of their product portfolio, were merged with larger corporations or were outright bought. This also led to employee layoffs as new management had their own plans and goals.
As bleak as the scenario has been in the last seven to eight months regarding layoffs and funding, the overall numbers are now beginning to rise. As per India’s largest human resource firm, TeamLease, Indian corporates have seen a 7% increase in their intention to hire. This number is estimated to reach as high as 70% in the coming few months as per their Employment Outlook Report for the period July-September 2022.
This upward trend is driven by the various initiatives announced by the government which are aiming at bringing the private sector back to its pre-pandemic levels. The market, post-pandemic, is driven by automation. Hence, it stands to reason that employees acquire the latest industry-specific knowledge and technologies.
As per Shantanu Rooj, CEO TeamLease – “Businesses are looking for digitally conversant, highly adaptive and multi-skilled people who can be moulded into any kind of role. Employees will need to develop not only adjacent skills but also diametrically opposite skills – combinations like technology, and creative, technology and psychology is becoming commonplace.”
Conclusion
In times of financial crisis, many companies take the easy road of layoffs, citing reasons of cost-cutting, staff reduction, mergers, buyouts, etc. This move is disruptive to individual lives. However, such times are cyclic in nature and beyond individual control. As the Indian economy rises and the situation gets better, so will the employment scenario.
FAQs
What is a layoff?
In simple terms, a layoff refers to the termination of employment for reasons other than the employee’s performance. It is mainly initiated by the employer for economic or business reasons.
What are the reasons for layoffs in startups?
The following are some of the major reasons for layoffs in startups:
Cost Reduction
Staff Redundancy
Relocation
Mergers and Buyouts
How many employees have been laid off by Indian startups?
Since the beginning of the pandemic, India has seen more than 25,000 employees lose their jobs and more than 11,500 employees have been fired this year (2022).
