ETtechIn total, 52 startups fired 17,989 employees spread across edtech, consumer services, ecommerce, health tech, logistics, fintech, enterprise tech, media and entertainment, agri-tech and cleantech.
Of this, about 44% of the layoffs occurred within 15 edtech companies – Byju’s, Unacademy, Vedantu, Byju’s-owned WhiteHat Jr and Toppr, Practically, FrontRow, Lido, Invact Metaversity, Yellow Class, Teachmint, Lead, Udayy, Crejo.Fun and Eruditus.
ETtechLonghouse reviewed the data with ET and pegged edtech as the sector ranking the highest in the number of layoffs.
“Edtech players thought that everything will continue to be digital with Covid-19 getting over. They underestimated the power of the physical. Second, they didn’t really solve for great learning experiences. Third, they did not use the money wisely to do a blended product of what was called a physical education,” Anshuman Das, managing partner at Longhouse Consulting, told ET.
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Edtech companies over-indexed on digital, over-hired, and did not build deeper products to create solid and long-lasting engagement with students. Therefore, they had to fire employees, Das added.
Some of the layoffs were, however, part of a clean-up process, he added.
“Consumers are moving back to the physical world. Companies like Flipkart, while not greatly positioned to get offline business, also did not over-hire because they are fairly mature,” he said.
During the first part of the year, most layoffs were concentrated on non-tech roles such as operations, academic and feet on street sales. But of late, a lot of the tech-focussed employees at startups such as Swiggy and Ola have also been let go, Das said.
SoftBank-backed Ola fired 2,300 contractual employees in 2022, as per the dataset. Most of these happened at the Bengaluru-based company’s call centre department, a person in the know told ET.
ETtechET reported in July that Ola was in the process of firing close to 1,000 employees even as it ramped up hiring for its electric mobility business.
Startups like Cars24, Meesho, Clear (formerly ClearTax), Furlenco, Oyo Hotels & Homes, and others fired a part of their total workforce during 2022.
Many of these firms cut back on teams within a few months of raising fresh capital as they realised that the funding taps were starting to go dry.
ET reported on December 27, citing its State of Startups survey,
that over 65% of startup industry participants said they would still opt for more job cuts to conserve cash in 2023.
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