Indian startups laying off employees fearing a tougher financial year ahead

Startups in India like Oyo, Ola and Quikr has started cutting jobs inorder to reduce costs predicting to have a harder financial year in 2020.

Quikr had already laid off one third of its employees over the last few weeks and even shutdown its beauty services business ATHomeDiva. Oyo is likely to drop 250 to 500 jobs as a part of its restructuring ,claiming that they had over 9000 employees in August. It has been reported earlier that Ola is expected to cut about 15%-20% of its workforce in the coming months. The Indian e-commerce payment system has fired about 500 employees according to an online news portal Entrackr, whereas another source says that these workers where on contract basis.

According to Quikr Spokesperson, its because of their cross-category model they will get a good idea on the comparative economics of different categories where they operate. The decision is made on this view so as to have a change in market offerings and this resulted in job rationalization.

It is because of the major global expansion on the last two years Oyo laid off some of its employees for reorganizing the company. They are also likely to replace some of its employees by giving them opportunity to attend a performance improvement programme. The three players Oya, Ola and Paytm  backed by SoftBank has raised a huge amount as capital this year. The Indian Hotel Chain Oyo has raised its capital over 1$1.5 billion in October. On the other hand Paytm gathered $1billion last month. Ola has also raised around $400-$500 million this year in multiple portion from investors including Hyundai and Flipkart.

Even several well-funded startups have stopped hiring individuals as the overall funding environment seems cautious. Investors said that there is a huge fall for big budget startups , a US based real estate company WeWork had a fall from $47 billion to $8 billion. Many companies are also coming up with new methods and instead of giving out a lump sum one time joining bonus they are shifting to one off payment based on individual and company performance. In this stabilizing environment they said they are seeing a conversion as the candidates are giving more importance to work rather than the CTC alone. Narayanan R Thammaiah, the chief people officer at Accel Partners said companies will still pay a premium and joining bonuses for certain designations and skills like digital market or product managers. But some companies like Paytm and Lime Road said they have always avoided paying joining bonuses. Others like  Knowlarity, Car Dekho and Urban Clap said they will be giving joining bonuses in extremely rare cases.