Tech Turmoil: Job Losses Surge in Indian Startups Amid Funding Decline
In 2023, job losses within startup and technology firms witnessed a notable uptick, registering a 15% increase compared to the preceding year. Layoffs.fyi, a platform tracking job cuts in the technology sector, reported that over 16,000 individuals faced unemployment, with an average of 45 people losing their jobs daily. This data, though not an exact measure, broadly reflects the trend, primarily capturing job losses in the startup landscape rather than established technology corporations.
The epicenter of these layoffs was Bangalore, the technology hub of India, with subsequent impacts in Gurugram, Mumbai, and Noida. Startup funding also experienced a downturn, plummeting from $25.9 billion last year to $8.1 billion in 2023, correlating with a rise in job losses.
Notably, the financial technology (fintech) giant, Paytm, made headlines by reportedly laying off 1,000 employees, contributing to the overall sector’s 2,141 recorded layoffs. Ed-tech faced the brunt with around 4,700 job cuts, followed by the food, finance, retail, consumer, and healthcare sectors.
Funding dynamics underwent significant shifts, with an 88.9% decline in ed-tech startup funding from $2.5 billion in 2022 to $0.3 billion in 2023. Food and agriculture tech startups saw a 73.5% decrease, while fintech startups witnessed a 66.1% funding decline during the same period.
Consumer-based startups secured the lion’s share of funding, amounting to $3.9 billion in 2023, trailed by retail ($2.3 billion), fintech ($2 billion), enterprise applications ($1.7 billion), and transportation and logistics tech ($1.6 billion).
Globally, a staggering 261,847 individuals faced job losses, with nearly 70% occurring in the United States. India, Germany, Sweden, and the United Kingdom also experienced significant layoffs in the technology sector.