Over 12,000 start-up employees in India lost jobs this year
What's the story
The global economic meltdown has resulted in job losses for over 22,000 people in the technology and start-up sector this year in the US. More than 12,000 workers in Indian start-ups have also lost their jobs. A dip in valuations and the inability to raise new funds have reportedly prompted companies which benefited from a pandemic boom, to downsize their workforce.
Context
Why does this story matter?
The ongoing COVID-19 pandemic and high inflation have played havoc on the financial health of start-ups and they are unable to raise funds. Amid this economic turmoil, companies have resorted to furloughing their workforce and the situation is expected to get worse in the coming months. This will impact the economy in both short as well as long term.
Figures
Tesla has downsized salaried workforce by 10%
Globally, companies like Robinhood, Netflix, and crypto platforms such as Vauld, Bybit, Bitpanda, Coinbase, and Gemini have trimmed their workforce. Elon Musk-led EV manufacturer Tesla has downsized the salaried workforce by around 10%. Even Niantic, the developer of the popular game Pokemon GO, has asked 8% of the workforce (around 85 to 90 people) to leave the company.
Worry
Over 60,000 Indians might lose jobs in 2022
In India, start-ups such as Ola, Vedantu, Cars24, Mobile Premier League, Blinkit, BYJU's, Unacademy, MFine, Trell, FarEye, Lido Learning, Furlanco, and others have fired roughly 12,000 employees to date. These companies are showing employees the door in order to survive during the funding crunch. In our country, more than 60,000 people might lose jobs this year, primarily in the edtech and e-commerce sectors.
Mounting worries
An additional 50,000 jobs will be lost by 2022-end
According to the experts, at least 50,000 more people employed in start-ups around the world might lose their jobs by the end of 2022 as part of 'restructuring and cost management.' In India, a normalizing COVID-19 situation and changed consumer behavior has brought start-ups back to ground from their pandemic highs, especially with the ed-tech industry facing its worst slump ever.