Meet the people hit by the great layoff

PremiumIllustration: Jayachandran

On his wedding day, Mayank Dubey, a senior business development associate at edtech startup Lido
Learning, was told that his team had been dissolved amid company-wide layoffs.

Dubey, formerly a sales associate at a larger edtech unicorn, had taken a pay cut to join Lido Learning in
September 2021, as he was hoping for a better work-life balance and a less toxic work culture. He had
also been offered a senior designation. “I finished my probation and was performing well. And then,
without any notice, we heard the company is shutting down. This was on 10 February, my wedding day,"
Dubey told Mint in a telephonic interview, speaking in a mix of Hindi and English.

Traumatised by the news, Dubey, who is based in Prayagraj, has been contacting Lido daily to get the
management to pay the promised severance of three months, noting that he is owed at least ₹85,000.

“I was expecting my salary to be credited and had to pay vendors for my wedding. It has been more than
three months and I have exhausted all my savings. I can’t even move to a different city for a better job
because of the expenses," he said. Dubey and his wife now live with his parents, to save on rent and
other expenses.

Finding no recourse and under pressure to find a job, Dubey took another salary cut in April. He is now
working from home in another job, as a customer sales executive. He drew ₹43,000 per month at Lido
Learning but is making less than half of that now. “I get ₹15,000 as salary now. This used to be my
expense earlier," he said.

Dubey’s story is just one of thousands playing out across India today. Some are being laid off over video
calls. One company transferred employees to distant locations forcing them to resign rather than be
fired, while another has made veiled threats about withholding final settlements. Every day, in every
way, hundreds of Indians are being forced out by startups, and struggling to cope as employers bring
their careers to a grinding halt.

Collateral damage

Earlier this month, the fintech Open became India’s 100th unicorn—a startup valued at over a billion
dollars. But unlike last year, when investors were falling over each other to fund startups and a unicorn
was born almost every week—there were 44 by the end of December—funding has slowed down and
there have been only 14 unicorns in the first five months this year, making the species appear somewhat
threatened.

Startups across the board are trying to keep the lights on as investors look to ring-fence their
investments from the global turmoil. Among other things, rising inflation, interest rates and oil prices, as
well as the supply chain crisis and commodity crunch resulting from China’s lockdowns and the Ukraine-
Russia war, have made for a very challenging operating environment, pushing venture capitalists to
partially turn off the funding tap.

The poor performance of startups such as Paytm, Nykaa and Zomato after listing has also made
investors cautious about exits and valuations.
The story is no different in the US, where tech stocks have taken a hammering this year. In fact, many
expect the US to slip into a recession this year, which is likely to have ramifications across the globe.

Last week, Bloomberg reported that venture firm Sequoia Capital had warned the founders of its
portfolio companies that the good times were not only over, there is no indication of when they’ll be
back. It warned founders to be prepared for a long-drawn recession, and called for a “cut exercise" to
conserve cash and reduce expenditure. Startups in the US, too, have been laying off people in droves.

In India, employees, as usual, have become the first casualties in the rush to cut costs as startups brace
for the “long winter". The big picture is well known and has been written about widely—since January,
at least 8,000 employees have been laid off/asked to resign across startups such as Lido, Better.com,
Vedantu, Unacademy, Meesho, Furlenco, Cars24, MFine and FrontRow. Mint reported earlier in the
month that recruiters expect another 5,000 to be fired over the next two quarters. Most of these
companies did not comment on the layoffs.

As these numbers fly about, however, the individuals who are affected are forgotten amid the focus on
the larger upheaval. We got up close and personal with Mayank Dubey and a few of those who were laid
off, and saw the human face of the layoff statistics.

Gone in 30 minutes

Many of these laid-off employees who spoke to Mint don’t want to be named. For one executive at
healthtech startup MFine, a sense of foreboding set in when the company stopped all paid campaigns
early in May. Then hiring was frozen across verticals. Two days later, the executive got a video call on
Google Meet from her manager.

“It was all over in less than 30 minutes," she said. “My email ID was shut down. I did not even get a
chance to download my salary slips or appraisal letter or even items I could add to my portfolio," she
said.

Within two hours, the company, based in Bengaluru, sent a courier to pick up her laptop and later sent
her salary slips for three months via email. It promised to pay some severance with her full and final
settlement after a few months.

This executive, who has seven years of work experience, has given herself a month or so to find a job or
go back home to Delhi to live with her parents, even though that might mean “losing her
independence".

Many companies have reached out to her through LinkedIn, but only a few of those leads have turned
into serious prospects. And not all of them have been as kind on the phone as they are in social media
posts while offering to hire recently laid-off employees.

“A few asks were strange. One company asked me to send the relieving letter for every previous
employer along with salary slips before they would even schedule an initial hiring call. Usually that
happens after a person is selected," she said.

Over the past week, she has been helping other younger colleagues with mock interviews at her
Bengaluru flat. “Other companies that are hiring are taking advantage of the situation. I have seven
years of experience and I’m scared, some of my other colleagues are only a few months into the
profession, they will need some guidance," she said.

Another MFine executive told Mint that she had been approached by many other digital healthtech
startups soon after she was laid off, but she is unlikely to join a startup again. “I left a very secure job to
join Mfine," she said. The company had assured her there was sufficient money in the bank and that
only a poor performance could jeopardise her career. “Four digital health startups called looking to hire
me. I am scared to join a startup again, even if it has been recently funded," she said.

Explaining the layoffs, Shripati Acharya, managing partner, Prime Venture Partners, which has invested
in MFine, said: “We are in unprecedented times and the steep change in macro conditions is particularly
difficult on companies in active fundraise right now. Unfortunately, restructuring and layoffs are
inevitable in such scenarios and are very hard decisions for entrepreneurs to make. MFine has built a
great product that is being used by millions of people and has built a huge hospital network with
esteemed doctors. This restructuring will give them an opportunity to pull through and continue to
provide access to quality healthcare."

Less pay or the highway

Many startup employees who were laid off know that their company has run out of capital and needs to
conserve cash. But they rue the lack of foresight that made these companies woo them out of secure
jobs with tall promises.

“I wish they would hire as per their requirements and not over-hire because I joined with the impression
that growth would sustain and was planning a long-term career with them," said a former executive at
Meesho’s grocery arm Farmiso, from Telangana, who was laid off in April. “Though I understand they
have to do it for business reasons, we were under the impression that this would be a stable job," the
executive said. Meesho integrated grocery into its main app and shut down Farmiso in April, laying off
150 executives.

Employees often become collateral damage in the startup ecosystem when funding dries up, says Ankur
Pahwa, partner, EY. “Reducing costs on infrastructure and real estate is hard to do for startups. But they
can keep the lights on for some more time by cutting back on employees, freezing hiring plans, reducing
marketing spends and cutting back on other distribution or discounting schemes they may be running,"
Pahwa added.

Many startup employees who have been laid off, have resigned themselves to salary cuts in their next
job. A former employee of digital mortgage company Better.com got a job within a month of being laid
off. But he had to take a 10% salary cut. Some of his other colleagues had to take steeper cuts.

With Better.com, he was providing back-end support to US real estate brokers. Now, the 30-year-old
executive works for a conventional real estate company in Bandra, Mumbai. “I got offered jobs at some
of the larger edtech unicorns, but I was clear that I did not want to work in such a role," he said. “Many
of my former colleagues have got jobs — mostly in the traditional retail and IT services industries.
Others have held out because they did not want to take salary cuts."

Another former Better.com employee, who was laid off in March, also found a job quickly with an
edtech startup, but only after taking a 30% pay cut. “There was no choice. I was not in a good
negotiating position and the company also knew it," the 34-year-old executive said, adding that he did
not want to risk staying unemployed for too long as this was the second time he had been laid off in two
years.

The executive had been working in the hospitality industry till May 2020, when travel companies hit by
covid laid off hundreds of employees. He spent a year at home in Jharkhand, surviving on his savings and
interviewing for positions, but very few companies were willing to offer him a position without a salary
cut. “I got a job with Better.com only in June 2021. It was supposed to be a secure job— that’s what we
were told. It was also a work-from-home job," he said.

While his salary has gone down by a third now, his expenses have shot up as he had to move to Delhi in
April to take up his new job. He has also had to reduce most of his discretionary and lifestyle expenses,
put off house repairs and focus on paying his home loan.

In some startups, employees are first put on performance improvement plans (PIP) ahead of layoffs. A
few weeks before he was asked to go, an edtech sales executive from a town in Uttar Pradesh was put
on a PIP. “We were given weekly targets. If that was not achieved, the company was asking for a
separation (resignation)," he said, adding that the targets kept changing and often were far too steep.

“They asked us to resign. If not, they threatened they would terminate us such that we would not get a
full and final settlement or an experience letter."

Be that as it may, it is clear that the distress in the sector is deep and likely to be prolonged. Employees
aside, startups need to improve their own performances if they are to weather the long winter.

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get
Daily Market Updates & Live Business News.

More Less