Centre is working to ensure that the laid off employees have a soft landing and enough time to find new jobs
Noting that the ongoing headwinds would likely cause further corrections, the minister directed Indian startups to build ‘more realistic’ growth assumptions for the next one year
Indian startups have so far laid off nearly 18,000 employees so far this year
Minister of State for Electronics and Information Technology Rajeev Chandrasekhar has reportedly said that the government will ‘probably’ not intervene to stop the layoffs in the startup and IT sectors.
In his interview with news channel NDTV, he said that the Union government is in touch with the founders of startups to ensure that the layoffs are ‘soft’ and that the impacted employees get enough time to find new jobs.
Among other things, the MoS highlighted the need to upskill the talent in the country. Chandrasekhar added that the government has set aside INR 460 Cr to address the talent gap among the youth.
“Maybe there is an issue where there are people of a certain type of skill, [while] the demand is of a totally different type of skill… And the government has spent and outlaid about INR 460 Cr to start a digital platform called ‘FutureSkills Prime’… which will allow youngsters within the industry to look for alternate skills…,” the minister said.
Calling the layoffs ‘not unusual’, the minister said that the layoffs were a global phenomenon and were being conducted across companies.
Blaming the pandemic and the ongoing geopolitical tensions for the global meltdown, the MoS noted that ups and downs were part of the ‘very DNA’ of tech companies and startups.
Noting that the ongoing headwinds had caused major market corrections, he called on Indian startups to build ‘more realistic’ growth assumptions for the next one year.
The Perilous Job Climate
Chandrasekhar’s comments have come at a time when the Indian startup ecosystem has been marred by unabated layoffs. Inc42 estimates that Indian startups fired nearly 18,000 employees this year so far, led largely by the edtech and consumer services brands.
The biggest culprit has been BYJU’S, which has fired more than 4,000 employees across its various verticals. Other major players such as Ola, OYO, Swiggy, Unacademy and Meesho have also laid off a chunk of their workforce.
The startups have largely blamed restructuring plans for the layoffs, but a capital crunch has also pummelled the burgeoning Indian startup ecosystem. Negative investor sentiment, geopolitical tensions and market corrections have wreaked havoc on the bottom line of these companies, which are already saddled with mounting losses and heavy cash burn.
Meanwhile, some experts have estimated that it may take a quarter to another year before the funding winter is finally over and startups return to normalcy. However, the path ahead looks unclear and could witness startups resort to maximum resource utilisation and cutting corners to stay afloat.
