Startup in Trouble: year 2023 The last week is going on. This year, IT companies and startups continued to face things like slowdown, layoffs and losses. By the end of the year, news of layoffs came in Paytm too. This year has been heavy for startups. More than 15,000 employees were laid off in nearly 100 Indian startups. According to data from Layoffs.FYI, many companies resorted to layoffs to reduce their expenses. Besides, Artificial Intelligence (AI) and Automation also fell upon the employees. The problem increased so much that many startups had to be shut down. Let’s take a look at these startups.
Startups in trouble due to these reasons
Indian startups were seen struggling for funding in 2023. The condition of these companies started deteriorating after Covid-19. New people were given jobs to meet the increased demand during the lockdown. As demand decreased, jobs were taken away from these people. Due to lack of funding, companies had to seriously reduce expenses. Due to economic slowdown in America and Europe, these startups were also adversely affected. IMF and World Bank reports also expressed the fear of global recession. Due to this, layoffs were done on a large scale. The strict rules of the Government of India also weighed heavily on them.
AI hits Paytm employees
Due to increasing use of AI in Paytm, about 10 percent employees were reduced. More than 1,000 employees of Paytm were fired from their jobs. Payment, loan, operation and sales divisions have been the biggest victims of layoffs.
Byju Ravindran mortgaged his house to distribute his salary
Byju laid off 2,500 employees in its second round of layoffs this year. Byju’s founder Byju Raveendran even mortgaged his house to distribute the salaries of the employees.
Three rounds of layoffs took place in Meesho
E-commerce website Meesho made layoffs thrice. The company has sent about 15 percent of its employees home. According to an email from Vidit Athreya, the company’s founder and CEO, the affected employees were given one month’s additional salary. another one E-commerce platform Udaan (B2B) furloughed 150 employees.
Big retrenchment in Mohalla Tech and Dunzo
Mohalla Tech Private Limited, which runs ShareChat and Moz, laid off about 20 percent of its employees in 2023 and Dunzo laid off 30 percent of its employees. Both the companies are facing cash crunch. About 1300 employees have been laid off from Mohalla Tech. This phase of layoffs may continue in 2024 also. Grocery delivery platform Dunzo About 300 employees have been evacuated.
Swiggy’s meat marketplace closed, last day of Zestmoney 31 December
Swiggy has laid off 380 employees from its product, engineering and operations departments. Besides, the meat marketplace has also been closed. fintech company ZestMoney had recently announced the final shutdown on December 31 after the acquisition talks with PhonePe ended. This startup could not bear the brunt of RBI’s strictness on Buy Now Pay Later scheme and it had to close its shutters.
200 people fired from Ola, CoinDCX also took a difficult decision
Ola laid off around 200 employees in 2023. The laid off people worked in Ola Cabs and its subsidiaries Ola Financial Services Private Limited and Ola Electric. There, Sumit Gupta and Neeraj Khandelwal, founders of crypto exchange CoinDCX, had announced through a blog post the termination of jobs of about 12 percent of the employees. Crypto startups are struggling with the rules of the Indian government. Due to high tax and TDS, their trading volume has decreased by 90 percent in one year.
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