Bengaluru Unicorns See Over 41,000 Employees Exit Amid Funding Winter: PrivateCircle

Widespread layoffs by Bengaluru-based unicorns amid a funding winter significantly propelled an exodus of over 41,000 employees from startups in India's Silicon Valley, according to a study by PrivateCircle Research.

In comparison, over 52,000 employees were hired by Delhi-based unicorns, with Paytm parent One97 Communications Ltd., PhysicsWallah and PolicyBazaar emerging as heavy recruiters.

As many as 41,208 employees either quit or were laid off in the period between September 2022 and July 2023 by Bengaluru-based unicorns. The analysis only includes employees for whom provident fund contributions were made, PrivateCircle said.

Delhi unicorns’ workforce, however, saw a net increase of 52,420 employees, with Delhivery Ltd. and BharatPe also contributing significantly. "This hiring trend was irrespective of a global funding winter which has led many organisations to cut costs and even lay off employees," it said.

On average, the 111 unicorns considered for the analysis had an attrition rate of 4.72% for the time period.

"Interestingly, three Indian unicorns—Zerodha, Zoho and Hike—managed to maintain attrition rates under 1%. Other unicorns that had below-2% attrition rates include Amagi, Postman, Freshworks, Acko, Cred, Games24x7, Druva, Icertis and Dream11, among others," it said.

The Indian startup ecosystem was hit by a wave of layoffs as organisations downsized to reduce costs amid uncertainties over macro conditions, tighter access to capital, and a downturn in demand after a Covid-led spike in 2020 and 2021. Startups such as Byju's, MPL, Unacademy and Vedantu, among others, resorted to mass layoffs as part of the trend.