COVID-19 has impacted the global economy hard and businesses are scampering to keep afloat. Most have taken the usual route that follows such hard times – layoff temporary and permanent staff to reduce operational costs as much as possible, without much consideration for the hardships they would face in this environment.
In India, as per the data published by CMIE on September 6, 2020, the overall unemployment rate has reached 8.1%. Breaking it down reveals that the unemployment rate in Urban India is 9.5%, whereas in Rural India is 7.5%.
Given the weak economic activities and uncertainty all around, several Start-up businesses have either laid off or furloughed, coupled with salary cuts to save cash after revenues took a hit.
About 85% of total layoffs are not covered by the media but we have tried to crowdsource the available data to create an analytical view of job layoff of Indian start-ups. Our data from 30 start-ups reveal that they conducted 12,012 layoffs since the COVID-19 pandemic hit India.
India implemented a total lockdown, halting economic activities, starting March 25, 2020, and it continued till May 31, 2020. Even after that lockdown restrictions were lifted gradually in phases, at a monthly cadence (currently in Unlock 4.0). Since April-June were the worst hit months, the trend shows most layoffs in the same months.
Let’s break it down by Industries or Business Sectors to see the hardest hit ones
- Construction: -50.3%
- Hotels and Transportation: -47%
- Manufacturing: -39.3%
- Mining and Quarrying: -23.3%,
- Finance, Real estate, and Business Services: -5.3%
- Utilities: -7%
Among Startups, Food, Retail, and Transportation are major hit industries because of Social Distancing, Lockdown, and Weak Demand. These are the sectors that create the maximum number of organized and unorganized employment.
In reality, the actual counts will be much higher than what we are representing.
Now that we have dissected the data by Months and Business Sectors, let us look at the most active needle movers from the 30 we picked for this analysis. Drumroll!!!
- Swiggy – 2250
- PaisaBazaar- 1500
are the major firms that have reduced the size of their headcount and significant salary cuts.
The picture is bad but not all gloomy. Despite huge layoffs, many start-ups and sectors are booming. Startups, as well as established names, in e-commerce, FoodTech, AgriTech, and Technology-based start-ups added to their headcount and are continuously seeing new opportunities in this pandemic and uncertain times.