Are layoffs in big startups a matter of concern for budding entrepreneurs?

Concern – No, Learning – Yes. We need to understand the reasons for the layoffs first. The startup scene in India started booming last year and this led to a lot of startups forming overambitious targets and efforts to scale their businesses. Without analysis their startups at a micro level, startups started marketing heavily and hiring aggressively to sustain the growth. This led to a big boom in startup hiring and somewhat created a small bubble in the process.

When investors started questioning the sustainability of the growth being seen in startups and money became more difficult to come by, startups had to assess their growth and business model. To become more sustainable and lean, they had to resort to mass layoffs to cut the extra fat they had developed in the recent period.

Hence, the startup ecosystem in India is here to stay and we will see rapid growth in the years to come. Startups should understand that growth should always be well paced and sustainable and analysis should dominate emotion in driving a venture.