Indian Startups Continue The Layoff Streak But Are Willing To Hire Skilled Gig Workers: Know Why? After a successful stint in 2019, Indian Startups were at a boon; quite a few even turned out to be giant unicorns by the start of 2020. But, unfortunately, just when the Indian startup market was attracting credible investors pandemic hit, and the tables turned.
Alas, it didn’t stall there; the Russia & Ukraine war added to the repercussions resulting in recession. These unprecedented changes in the World economy led to squeezed funding, delayed stock listings, and squirmed growth; all these factors engendered accelerated layoffs for startups, which are still ongoing.
In 2023, startups raised only $2 billion in the first quarter against $25 billion in 2022, which is shockingly less. Thus, the number of startups letting go of their employees is high, as they are short of funds to pay them salaries. In fact, over 26k employees have already been laid off by startups since 2022 till date as a cost-cutting technique.
However, startups now gravitate toward skilled gig workers to achieve several objectives. While the hiring pattern is reduced for full-time employees to over 35%, the demand for gig workers in Indian startup markets has risen startlingly to over 21%. But, it is restricted to gig workers who make more than Rs 1,50,000 monthly.
For the unversed, gig workers are professionals who are not in any binding contracts with a single employer; they are independent freelancers who are temporary hires. Most of these hires for gig workers are into three departments: business then, finance, and Edtech. Sadly, freshers are also facing the music due to this situation, and over 13% decline is observed in their CTC patterns.
Startup entrepreneurs prefer gig-workers over full time employees because they want to encourage flexible & hybrid work culture, are leaning towards automated platforms, and want to reduce costs.
On the whole, it won’t be incorrect to say that the increase in the number of layoffs in startups is the outcome of the public equity markets hard post pandemic and was pressurized any Russian invasion on Ukraine.
