Indian Tech Startup Layoffs Plunge in 2024: Job Market on the Rise?
Indian tech startups witnessed a significant drop in job cuts during the first quarter (Jan-March) of 2024, according to a report by layoffs.fyi, a website tracking layoffs in the tech sector. Indian Tech Startup Layoffs Plunge in 2024. While over 2,000 employees were laid off, this number represents a 60% decrease compared to the same period in 2023.
This decline in layoffs coincides with a reduction in venture capital funding for startups. In 2023, which saw a “funding winter,” a staggering 16,400 employees were let go from 111 companies. Conversely, 2021, a year marked by a surge in funding, witnessed significantly fewer layoffs, at around 4,000.
Funding and Hiring Cycles Tightly Linked
The report suggests a strong correlation between funding rounds and hiring practices in the Indian startup ecosystem. When venture capital funding is readily available, startups tend to hire aggressively to fuel growth. However, when funding dries up, companies are forced to make tough decisions, often resulting in layoffs.
This trend is particularly evident in the case of Swiggy, a foodtech unicorn, which laid off 380 employees as part of a company-wide restructuring. Similarly, social media platform ShareChat downsized its workforce by firing nearly 20% of its staff, roughly 500 employees.
Early Signs of Funding Normalization
While the overall funding environment remains cautious, there are signs of normalization, especially for early-stage startups. This, coupled with the significant decrease in layoffs in the first quarter, suggests a potential shift towards a more stable job market in the Indian tech sector.
Experts believe that if funding rounds continue to stabilize, particularly for early-stage ventures, the frequency and scale of layoffs in the Indian tech industry are likely to decrease further.
A Look Ahead
The future of the Indian tech startup job market remains to be seen. While the decline in layoffs is a positive sign, the overall economic climate and the availability of venture capital will continue to play a crucial role. Newspreneur will keep you updated on the latest developments in this dynamic sector.