[Updated] HackerEarth Trims Workforce, Introduces Pay Cut Globally

Prime Venture-Backed HackerEarth Trims Workforce, Introduces Pay Cut Globally

SUMMARY

HackerEarth has not disclosed the number of employees that have been sacked from its India operations

The startup said, the move is a result of the macroeconomic conditions including economic downturn, funding crisis and impending recession in the US market

When contacted, the startup informed that it provided a severance package including eight weeks of pay to impacted employees among others

Update | 12:45 IST, 15th Feb

The earlier version of the story mentioned the total number of employees in the company based on LinkedIn data. The same has been edited to reflect the numbers shared by the company. The number of laid-off employees have been updated as well.

Tech-focused skilling and hiring startup HackerEarth has laid off over 8% employees working in different verticals, as per Mint report.

According to its LinkedIn page, the startup employs more than 630 employees. However, post publishing the story, the company clarified that it had a total headcount of 190 employees and said that the 600 number also includes student ambassadors who are not employees.

According to the Mint report, the impacted number of employees stands at around 17.

HackerEarth attributed this move to the unfavourable macroeconomic conditions including economic downturn, funding crisis and impending recession in the US market.

“2020 and 2021 were years of strong growth for us. We built a team in anticipation of this trend continuing. Instead, the second half of 2022 saw a slowdown in hiring, which resulted in lower growth in our business than what we had prepared ourselves for. However, to maintain long-term sustainability and profitability, we had to align ourselves for leaner times ahead,” said Sachin Gupta, CEO of HackerEarth.

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The startup has also introduced pay adjustments across the organisation to overcome challenges and keep the business afloat in the long term.

It further said that it has provided a severance package including eight weeks of pay to impacted employees. While employees with more than two years of stint in the company have been given one additional week of pay for every one year of their service.

“There are organization-wide pay adjustments which are graded – the leadership team has taken the largest cut to minimize the impact on lower salary staff. It has been painful taking these steps and I take full responsibility for our decisions,” Gupta added.

The development comes years after the startup secured $6.5 Mn in a Series B funding round led by the family office of ZIGExN CEO Jo Hirao and other existing investors.

Founded by Sachin Gupta and Vivek Prakash in 2012, the US and Bengaluru-based startup helps tech organisations recruit developers via its platform. It also helps companies upskill their employees via its platform Sprint.

Earlier, it claimed to have witnessed 100% revenue growth in the US market and carry out more than 2.1 Mn assessments in the year 2020.

Its cap table includes Beenos Partners, BizReach, BEENEXT, Prime Venture Partners, Smile Group and TA Ventures, among others.

The recent layoff has occurred at a time when the startup ecosystem is grappling for survival owing to various factors such as ongoing funding crunch, the Russia-UK war, rising market inflation and low investors’ confidence.

As a result, many startups have resorted to cost-cutting measures including pay cuts, layoffs, business pivots and restructuring of the business. According to an Inc42 layoff tracker, over 21,500 employees have been laid off by Indian startups since January 2022. Some of the latest additions to our layoff list are Ola, Fareye, Exotel and Innovaccer.