Meta India may not face brunt of layoffs; IT firms dig deep to catch moonlighters

By Daisy On Nov 10, 2022

Meta announced on Wednesday it will lay off 11,000 employees or around 13% of its workforce. But sources at Meta India told us the announcement may not be very significant for the company’s 400-odd employees here. CEO Mark Zuckerberg took the blame for the company’s first-ever mass sacking, saying he was guilty of over-optimism about its future after growth surged during the pandemic.

Also in this letter:
■ IT firms look beyond provident fund portal to catch moonlighters
■ Pi Ventures raises Rs 66 crore for second fund
■ SaaS unicorn Netcore puts off IPO over ‘uncertain market conditions’

Meta sacks 11,000, turning tech turmoil into meltdown

Meta said it was laying off 11,000 employees – about 13% of its global workforce – on Wednesday, marking it the second major announcement of job cuts by a global social media company after Twitter fired nearly half its workforce last week.

India impact: Sources in the know told us the impact of this announcement may not be “very significant” at Meta India. More details are likely to be available over the next week, they added. Meta employs about 400 people in India across functions from engineering to products, sales and external communications.

In response to our queries, a spokesperson for Meta India said the company would not be “providing details on specific team impact”.

Got this wrong, says Zuck: In a statement shared with Meta employees, cofounder and chief executive officer Mark Zuckerberg said the company would make further cuts on discretionary spending and extend its freeze on fresh hiring to March 2023.

Zuckerberg’s note said that as more people stayed online during the pandemic, Meta expanded its investments since it hoped the trend would continue post-pandemic as well.

“Unfortunately, this did not play out the way I expected. Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected. I got this wrong, and I take responsibility for that,” he said.

Layoffs season: Last week, Twitter announced widespread layoffs under its new owner, billionaire Elon Musk, who sacked about half of its 7,500 employees in a chaotic overhaul. The move wiped out almost the entire Twitter team in India, which had roughly 230 members as of last Friday.

Salesforce is also preparing for a major round of layoffs that could affect as many as 2,500 workers, Protocol reported on Wednesday.

Snap, the parent company of Snapchat, is also scaling back, saying in August that it would eliminate 20% of its workforce.

IT firms look beyond provident fund portal to catch moonlighters

Background verification firms are reporting a spike in requests from IT companies for additional checks on employees as managers step up their efforts to stop workers from pursuing a second job on the sly.

What’s happening? According to these firms, one out of three of their technology clients now want some level of checks for ‘moonlighting’, or dual employment, among both new joinees and existing employees – a sharp increase in the level of scrutiny from some two years ago.

Background verification companies are scouring freelancing websites, such as freelancer.com and fivver.com, and checking tax forms like 26AS, apart from conducting their regular check of the Employees Provident Fund Organisation (EPFO) portal for signs of moonlighting.

They told us about 7-8% of prospective and existing employees have been found to be engaged in parallel assignments.

The companies and HR experts said most candidates found to be working more than one job are dropped, while existing employees are laid off.

Ashok Hariharan, chief executive at tech-based identity verification firm IDfy, said, “Two years ago, we had no clients who were enquiring about this… Today, one out of every three of our technology clients wants some level of checks for moonlighting or dual employment.”

AuthBridge Research Services, another large player in this space, said the number of consultations has risen “exponentially” over the last few months.

Industry divided: Technology and software companies in India are divided on whether to allow their employees to moonlight.

Last month, Infosys became the first software company in India to allow employees to take up external gigs with the prior consent of their managers, subject to certain conditions.

TCS, however, said moonlighting was a violation of its employee contracts. Wipro and Infosys earlier said that they had sacked employees for moonlighting.

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Pi Ventures raises Rs 66 crore for second fund

Pi Ventures, which backs deep-tech and artificial intelligence startups with early-stage capital, has raised Rs 65.9 crore (about $8 million) from British International Investment (BII) for its second fund.

The investment by UK-based BII, a development finance institution, takes the corpus of Pi Ventures’ Fund-II to about Rs 530 crore, said Manish Singhal, one its founding partners.

Time frame: Pi Ventures, which has backed startups like Agnikul, Niramai and Locus, plans to make the final close of Fund-II by the first quarter of 2023, said Singhal. The fund had marked its first close at Rs 300 crore in January.

Singhal told us that while Fund-I was focussed on companies offering AI-based solutions, Fund-II will focus on companies offering deep-tech solutions in the segments of blockchain, spacetech, biotech, artificial food and material science.

SaaS unicorn Netcore puts off IPO over ‘uncertain market conditions’

Netcore Cloud, a Mumbai-based bootstrapped SaaS unicorn, has put off its initial public offering (IPO) on the Indian stock exchanges owing to uncertain macroeconomic factors and a perceived softness in customer decision-making in the SaaS market, founder and group MD Rajesh Jain told us.

Details: Netcore had originally started the IPO process in August this year, with the listing slated for February-March next year. But after conversations with bankers, the company decided that it would review IPO prospects again by February 2023, and focus on building new products and bolstering presence in the US market, where it made a $100-million acquisition in March.

Netcore sells marketing automation software to e-commerce firms and D2C companies.

Factors like rising lending rates in the US and the war in Ukraine have weighed on market sentiments, Jain said. “Secondly, I want to go into my IPO with a high degree of confidence about my future numbers,” Jain said, referring to the phenomenon of software buyers showing signs of delayed decision-making on purchases.

TWEET OF THE DAY

Top unicorn founders team up to boost Mumbai tech ecosystem

A group of 35 top unicorn and soonicorn startup founders have come together to set up the Tech Entrepreneurs Association of Mumbai (TEAM) – a grouping to promote Mumbai, the financial capital of the country, as a potential base for technology companies across sectors such as fintech, media, gaming, and others.

Details: Bengaluru is famed for being the startup capital of the country, with Delhi-NCR region closing in on the second spot.

TEAM aims to push for government sops to make affordable housing available to tech employees, and create special economic zones in an effort to boost Mumbai’s startup ecosystem.

The association, which has been registered as a not-for-profit entity, will hire professionals to work along with regulators, policymakers, and various government bodies on issues such as affordable housing, tech talent, and amping up Mumbai’s ecosystem.

Leading the effort are Dream Sports founder Harsh Jain and Haptik founder Aakrit Vaish, among others.