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Although sometimes a necessary measure, layoffs cause ripples of uncertainty, financial burden, and emotional distress, directly and indirectly impacting the lives of those involved. In 2023, layoffs among startups and technology companies increased by 15% compared to the previous year.
According to Layoffs.fyi, a platform that monitors layoffs in the technology industry, through media sources, more than 16,000 people were affected by these layoffs. Although the data is not an exact measure, it provides broad insight into this trend. Notably, the focus is primarily on layoffs at startups, as opposed to established technology companies.
Data compiled by the website reveals an alarming average of 45 layoffs per day, an increase of 15.3% from the 14,224 layoffs a year ago.
The epicenter of these job cuts was primarily in India’s tech hub Bangalore, followed by Gurugram (2,295), Mumbai (1,600) and Noida (1,420). At the same time, startup funding faced a notable downturn this year, according to Tracxn data. In 2023, startups received $8.1 billion while 16,398 jobs were lost, in stark contrast to $25.9 billion in funding the previous year, when 14,224 people were laid off. .
Notably, fintech giant Paytm has reportedly initiated job cuts affecting 1,000 employees, contributing to a total of 2,141 job cuts across the sector this year. The edtech sector took the brunt with around 4,700 layoffs, followed by the food (2,765), financial (2,141), retail (1,772), consumer (1,488) and healthcare (991) sectors. (details shown in Figure 2).
Funding for edtech startups plummeted 88.9% from $2.5 billion in 2022 to just $300 million in 2023. Similarly, food and agritech startups declined by 73.5%, and fintech startups declined by 66.1% over the same period. .
Interestingly, consumer-based startups secured the highest amount of funding in 2023 at $3.9 billion, followed by retail ($2.3 billion), fintech ($2 billion), enterprise applications ($1.7 billion), Transportation and Logistics Technology ($1.6 billion).
A staggering 261,847 people worldwide faced job cuts, with nearly 70% of those affected concentrated in the United States, followed by India, Germany, Sweden and the United Kingdom. This data highlights a worrying picture of the technology and startup landscape, revealing major disruptions to hiring and funding across sectors and geographies.
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