Candidates shunning startup jobs amid layoffs

Bengaluru: Amid laying off employees by several Indian and global startups, many of the prospective candidates are shying away from joining these new age companies, fearing job instability. Candidates, who are taking up new offers, are preferring to join established startups with no concerns over job threats.

HR experts said that hiring activity in the domestic startup ecosystem is stabilising and the hyperactivity is being replaced by more rational approach by both startups and candidates.

"Indian startup ecosystem remains strong. The sector was a lot more attractive for candidates across sectors during the upswing. Then came the downtrend, when prospects were not that keen to join startups. Now, things are more neutral as candidates are evaluating offers on case-to-case basis and this is an ideal thing," Aditya Narayan Mishra, CEO of CIEL HR, told Bizz Buzz.

"Startups are not in a hiring spree and not chasing candidates. The exponential rise in salary is no

longer there. Offers to join ratio have increased now to around 70 per cent from 50 per cent earlier," he added.

Mishra, however, said that what is happening (in terms of firing) is not reflection of the ecosystem, but rather specific to individual companies.

Both domestic and global startups are laying off staffers amid an uncertain economic environment.

Firing of staffers in social media platform, Twitter is currently hogging a lot of limelight. After Elon Musk took over the company, half of the staff of Twitter got affected with around 180 employees in Indian operations losing their jobs. Similarly, India's most-valued startup and edtech major Byju's is in news for firing 2,500 employees, which is about five per cent of its 50,000 strong workforce. Ecommerce startup Udaan has laid off about 350 staffers in second round of firing.

More than 12,000 employees of several Indian startups lost jobs in 2022 so far with many large new age companies rationalising workforce to optimise cost. Multiple such layoffs have happened in a very rash manner with many former employees venting their anger on digital platforms.

"Many of the affected employees are staring at a difficult phase as such mass layoffs are coming at a stage when job creation has slowed down. So, we may see many employees opting for less-paid jobs or even a phase of unemployment," said another HR expert, who wished not to be quoted.

Funding to domestic startups dropped to its lowest point since Q1 of 2020, to $2.9 billion in July-September period of 2022. This was a massive 66 per cent drop from the previous quarter and 81 per cent drop over the same period last year.

"The pain seen in startups globally is likely to continue for some more time. One thing is clear that candidates, startups and investors are more rational in their approach now," said Mishra.