Throughout 2023, more than 24,000 employees were reportedly laid off by 100 or more Indian startups. Driven by financial constraints and investor expectations for profitability, startups across diverse industries implemented workforce reductions to control expenditures.
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As per information from market research firm TheKredible, shared in a report by ToI, unicorn companies like the troubled ed-tech startup Byju’s, along with ShareChat, Swiggy, and Unacademy, have recorded the highest number of employee terminations.
The report said in 2023, startup funding experienced a significant decrease, reaching a seven-year low of $8.2 billion, in contrast to the approximately $25 billion that companies had secured from investors in the previous year, 2022.
In addition to larger companies reducing their staff, a group of small to mid-sized startups closed their doors last year, contributing to the pool of laid-off employees. The report added data revealed that over 10 startups ceased operations in 2023.
Given that startups generally depend on external investments to fuel their expansion, an extended funding shortage posed challenges for smaller players to maintain their operations.
Moreover, regulatory hurdles and the struggle to establish a sustainable business model further compounded the challenges faced by startups such as ZestMoney, leading to the cessation of their operations, the report highlighted.
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