Amid a capital crunch creeping into the market, celebrity-focused online learning and community platform FrontRow has sacked 145 employees over an email, according to reports.
Citing a funding crunch, the EdTech firm has laid off almost 30% of its full-time and contractual employees.
Reports said FrontRow has sacked employees to increase efficiencies and lengthen its runway. The company said most of the layoffs were from the sales and business development teams.
During the last five months, Indian startups have reportedly laid off over 6,000 employees. Estimating the same, co-founder at Glamyo Health, Archit Garg pegs startup layoffs at 10 times the current number around 60,000.
Some of the popular start-ups in India, including Unacademy, Cars24, Vedanta, Meesho, Trell, Furlenco and many others let go of more than 5000 employees in India.
Most employees who were laid off by the firms claimed that they were asked to leave without any prior notice.
‘Startup founders may find it difficult to raise funds in coming months’
Industry players opined that startup founders will find it difficult to raise funds at attractive valuations in the coming months.
During a joint program with Meta, formerly known as Facebook, Kalaari Capital’s Founder and Managing Director Vani Kola has said that customers may defer their purchase decisions and startup founders will need to tighten up their belts and look for alternative opportunities for the business.
“There is going to be a period where customers are going to delay certain kinds of decision making, but maybe there are other decisions that they make. I do think, and added to that liquidity that has overleveraged, funds in public markets will flow down … While we only recently celebrated the 100th unicorn, any of those 100 unicorns today if they have to raise capital will perhaps get a haircut of 30 if not 50 percent, “Kola said.
Kola said she has seen four to five financial downturns and whenever there are big shifts, opportunities open up and challenges also come up. She was seconded by Ajit Mohan, Vice President and Managing Director, Meta in India, who said days are coming when access to capital may become difficult.
“Really seeing this moment where capital may be difficult, at least for the next few months, maybe even more than that, but it does open up many other windows including the opportunity to do deeper problem solving, to take the time to kind of solutions for product-market fit, “Mohan said.
He said there will be slightly less competition for talent compared to the situation in the last two years.
“That’s a big opportunity to build the right teams, I think if other companies are not scaling up at none, and that’s an opportunity for you to go and grab some of the best people out there,” Mohan said.
Meta announced a partnership with Kalaari Capital to upskill and scale young, invested businesses in the micro, small and medium business segment by providing them with timely business skilling support.
The partnership is a part of Meta’s VC Brand Incubator Initiative, which is an industry-first program for building the ecosystem for the growth of small businesses in the country along with leading venture capital funds.
“We do have a very diverse set of people and whether that’s culturally differentiated, or whether they are at different income levels, and therefore, you know, the point that we keep hearing is when you solve for India, you can solve for the world. “It’s kind of true because India looks like the world more than any other country does,” Mohan said.