Startups are looking for cost-cutting by reducing the staff strength during the tightening of larger-sized funding rounds.
Over the last few weeks, more than 1800 contractual and full-time employees have been fired from several startups in different sectors. These include tech industry Unacademy and social commerce startups like Meesho and Trell, Lido Learning- Online learning platform and Furlenco – furniture rental startup. Some of these still look to cut more jobs.
The trend is likely to continue, even though the early-stage investment ecosystem has yet to drastically slow down. Investors have begun to demand that high-growth businesses return to basics i.e. seek profitability and reduce capital burn. According to industry analysts, if these businesses fail to obtain subsequent rounds, layoffs could worsen during a funding downturn.
“These layoffs are taking place across enterprises and segments…. It is due to forceful hiring by some businesses and subsequent changes in plans,” said Aditya Narayan Mishra, CEO of Ciel HR Services, a staffing agency.