How early-stage startups are bucking the trend as layoffs rise at big tech firms
As the world at large stares at a recession, tech majors and startups have been laying people off, all over.
Some of the biggest companies that have fired employees in the thousands include the likes of microblogging site Twitter, Facebook parent Meta and e-commerce giant Amazon to name some.
India-based employees of these companies, too, have had to face the axe, as have those of several local startups, especially in the ed-tech space.
Over the past few months, more than 50,000 people have lost jobs across key Big Tech firms. Moreover, big tech firms' job openings in India are also down by nearly 90% of their typical hiring volumes, Moneycontrol reported.
On top of that, in India, many startups, such as Byju’s, Ola, Cars24, Chargebee, MPL, Udaan and Vedantu are among startups that have laid people off this year. According to the Moneycontrol report, as of November 29, 17,800 employees had been laid off.
But the seeming enormity of these numbers does not necessarily mean that there is doom and gloom all over the Indian startup ecosystem as far as jobs go.
While it is true that big tech companies as well as well-established startups have been firing people in a bid to cut costs and increase their runway as venture capital funding dries up all over the world, the numbers are being offset by early-stage companies that have been getting VC money and have used that to hire more people, in order to scale up operations.
News reports citing a report by staffing company Xpheno say that the month of October saw as many as 11,000 active job openings being posted by Indian startups.
As of last quarter (ended September 30), Indian startups had 13,000 active job openings. Although overall openings have seen a downward trend over the past four-five quarters, Xpheno said that it has already started seeing November figures showing an uptick and expects a steady recovery.
In hiring mode
Early-stage startups snagging Series A and Series B funding are some of the most well-capitalised startups in the country. And these firms are among those actively hiring. This is significant because startups remain among the biggest employers of tech graduates in the country.
Founders of several well-known startups like upGrad, Dream11, Koo, Razorpay-owned Ezetap and space tech startup Kawa Space recently took to social media sites like Twitter and LinkedIn, saying that they were looking to expand their teams. Moreover, some of these founders invited Indian techies who had been laid off in the US and elsewhere, to come and apply for jobs at their companies and return home to India.
News reports say ed-tech unicorn upGrad will be hiring 1,400 people across several departments in India and outside. Koo is reportedly looking to hire some of the 8,100 people fired by Twitter. Koo is a homegrown clone of the microblogging site and thinks it could benefit from the tech know-how of engineers at Twitter who have been let go.
“Very sad to see #RIPTwitter and related # to this going down. We'll hire some of these Twitter ex-employees as we keep expanding and raise our larger, next round,” Mayank Bidawatka, Koo’s co-founder, posted on Twitter.
“They deserve to work where their talent is valued. Micro-blogging is about people power. Not suppression,” he added, taking a dig at new Twitter owner Elon Musk’s changes at the organisation.
News reports also cited Harsh Jain, Co-founder and CEO of Dream11, as urging Indian tech talent, especially those on H-1B visas who were laid off in the US, to come back home. The fantasy gaming unicorn currently has openings across design, product and tech teams, Jain added.
“With all the 2022 Tech layoffs (52,000+!) in the US, please spread the word to remind Indians to come back home (specially those with visa issues) to help Indian Tech realise our hyper-growth potential in the next decade!” he said in a LinkedIn post.
“We at Dream Sports are a profitable, $8 Billion Co with 150 Million+ users and 10 kickass portfolio companies in Fantasy Sports, NFTs, Sports OTT, FinTech, Sports Experiences etc (Dream11, RARIO, FanCode, DreamPay, DreamSetGo) who are constantly looking for great talent, specially with leadership experience in Design, Product & Tech!,” he added.
Other companies that are reportedly looking to tap available talent include Razorpay-backed payment startup Ezetap, which is looking to add more than 100 people to its staff, as well as Mumbai-based Kawa Space.
Who’s in demand?
Xpheno says companies are typically looking to hire mid-to-senior level employees, who make up to 65% of the people being courted, while demand for entry-level people is low.
In terms of expertise, the demand for analytical skills, database skills, software development and engineering roles remain prominent, with nearly 70% of the active demand seeking these skills with experience.
Full-stack engineers, senior software engineers, product managers and programme managers are among the top roles in demand.
So, what’s the catch? Given the current market and talent pipeline availability, startups are looking to onboard talent for these skills at pay packages 12-18% lower than in FY22.
Other green shoots
But this is not the only trend signalling green shoots in the country’s startup ecosystem.
Demand for office spaces is again gaining momentum and startups are at the forefront of companies looking to rent more offices, given that most companies are now back to full-time work from office as Covid-related restrictions have eased.
According to a report by real estate consultancy JLL, Indian startups leased the most office space in the first half of 2022. According to the report, the startup sector saw an expansion in gross leasing with its share growing from 17% in 2021 to 28% in the first half of 2022.
Among India’s cities, Bengaluru had the most leased space by startups with an increase from 1.75 million sq ft in 2021 to 2.19 million sq ft in the first half of 2022.
Co-working space providers and the IT and ITeS segment were the biggest contributors towards space leased by startups since 2021 in Bengaluru.
This was followed by Delhi and Mumbai. The national capital witnessed a significant jump in gross leasing from 0.80 million sq ft in 2021 to 1.96 million sq ft this year - more than twice the increase.
“Indian startups industry is pegged to be one of the top office occupiers in the coming years and has also been extremely active in terms of real estate,” said the ‘A startup’s guide to office space’ report.
The top seven cities — Bengaluru, Hyderabad, Mumbai Metropolitan Region, Pune, National Capital Region, Kolkata and Chennai — accounted for 20% of the total demand for coworking space in the country in the first half of 2022, an Anarock report said.
At 19% of the total 65,171 flex seats leased, startups have also been one of the largest takers for flex seats in the first six months of 2022. This is up from 16% in 2021.
“The startup ecosystem in the country has been rapidly expanding and has emerged as one of the largest consumers for flex space having absorbed close to 12,500 seats in H1 2022,” said Samantak Das, Chief Economist and Head of Research and REIS, India, JLL. “Along with cost rationalisation, access to new-age, tech-enabled offices which represent their identity are key drivers which we think will result in increased demand from new startups for flexible office spaces.”
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