Despite being a necessary measure at times, layoff happen to generate ripples of uncertainty, financial strain, and emotional distress, affecting the lives of those directly and indirectly involved. In 2023, job reductions within start-up and tech firms increased by 15% compared to the prior year.
According to Layoffs.fyi, a platform monitoring tech sector job cuts through media sources, over 16,000 individuals were affected by these layoffs. The data isn’t a precise gauge but offers a broad insight into this trend. Notably, it mainly focuses on job cuts in start-ups as opposed to established tech corporations.
The data aggregated by the website reveals an unsettling daily average of 45 job losses, marking a 15.3% increase from the previous year’s count of 14,224 layoffs.
The epicenter of these job cuts primarily resided in Bangalore, India’s tech hub, followed by Gurugram (2,295), Mumbai (1,600), and Noida (1,420). Concurrently, startup funding faced a notable downturn this year, per Tracxn’s data. Startups received $8.1 billion amidst 16,398 job losses in 2023, a stark contrast to the $25.9 billion funding in the preceding year when 14,224 individuals were laid off.
Notably, Paytm, a fintech giant, reportedly initiated layoffs affecting 1,000 employees, contributing to a sector-wide tally of 2,141 job cuts this year. The ed-tech sphere bore the brunt with approximately 4,700 layoffs, followed by the food (2,765), finance (2,141), retail (1,772), consumer (1,488), and healthcare (991) sectors (as detailed in Chart 2).
Funding within the ed-tech startups plunged by 88.9% from $2.5 billion in 2022 to a mere $0.3 billion in 2023. Similarly, food and agriculture tech startups saw a decline of 73.5%, while fintech startups witnessed a 66.1% decrease within the same period.
Interestingly, consumer-based startups secured the highest funding at $3.9 billion in 2023, followed by retail ($2.3 billion), fintech ($2 billion), enterprise applications ($1.7 billion), and transportation and logistics tech ($1.6 billion).
Globally, a staggering 261,847 individuals faced job cuts, with nearly 70% of those affected located in the United States, followed by India, Germany, Sweden, and the United Kingdom. This data paints a concerning picture of the tech and startup landscape, revealing significant turbulence in employment and funding across various sectors and geographies.
