Over 9,000 startup jobs slashed between Jan-March; betting, gambling apps advertise despite ban

Layoffs in the startup and tech ecosystem have continued into 2023, according to data from recruitment platform Careernet. The situation might not get better any time soon. This and more in today’s Morning Dispatch.

Also in this letter:
■ Investment in startups to remain muted in 2023
■ ONDC to evaluate e-commerce platforms based on commitment
■ Delhi HC issues notice on Google appeal against order

Startups fire 9,400 between January- March, more cuts coming


Hi, this is Supriya Roy in Bengaluru. Layoffs in the technology sector don’t surprise us any longer. For over a year, the biggest tech companies have cut jobs and pruned their workforce. Today, we take stock of how the first quarter of 2023 was for the Indian startup ecosystem, in terms of jobs and hirings, and tell you if the situation will change going forward.

What’s driving the news? Nearly 9,400 staffers across startups were fired during the first three months of this year, per a report by recruitment platform Careernet shared exclusively with ETtech. Edtech firms including Byju’s and Unacademy, have fired the largest numbers – over 1,000 employees at a time.

Fintech, ecommerce, SaaS and health tech companies are also downsizing majorly. Meanwhile, traditional sectors such as banking, financial services and insurance (BFSI) have increased their hiring, said Abhimanyu Saxena, founder and CEO of upskilling and reskilling platform Scaler.

About startup employees lose jobs in Jan March 2023_Graphic_ETTECH
Tell me more: About 70% of all startups laid off 100-300 people each in the last quarter. This included the likes of instant delivery services provider Dunzo, healthtech software-as-a-service (SaaS) startup Innovaccer and ride-hailing major Ola, among others.

What’s next? While the layoffs are expected to continue, hiring in senior roles was also down by around 80% in the March quarter compared with the same period last year, according to Careernet.

ETtech reported last month that hiring for senior leadership roles had dipped across new-age tech firms. “The situation will likely not improve in the next two quarters,” said Anshuman Das, cofounder and CEO of Careernet.

senior hiring for Jan-March 2023_Graphic_ETTECH
The bottom line: Several startup founders and investors told ETtech that even with adequate capital, their companies are going slow on hiring as growth plans have been redesigned in line with the current macroeconomic conditions.

Ads of betting, gambling sites still in play on social media

sports betting and gambling_online games_online gaming_THUMB IMAGE_ETTECH
Rampant advertisements of online betting and gambling apps through social media channels such as WhatsApp, Instagram, and YouTube are becoming a cause of concern. These openly flout India’s new gaming regulations prohibiting betting and wagering of any kind.

What’s the matter? Apps such as FairPlay and Appa Book are being promoted on social media by celebrities and micro-influencers with millions of followers. Among these are TV actresses and internet personalities who don’t specify that the campaigns they participate in are paid sponsorships or advertisements, despite the law mandating it.

gaming betting
Catch-up quick: Earlier this month, the Centre issued regulations to govern the online gaming industry, prohibiting games that involve wagering or betting with real money. MoS IT Rajeev Chandrasekhar said the government would establish three self-regulatory organisations (SROs) that will approve games that comply with the rules for operation in the country.

Skirting the law: Though TV and print advertisements of such apps have decreased during this year’s IPL, they continue unchecked online. Creators and influencers prominently display company logos and sign-up details even if the content they upload has nothing to do with gambling and betting.

Most early-stage investors expect muted 2023: report

IT expects a growth slowdown_losses_THUMB IMAGE_ETTECH)2
In what could be another setback to the startup ecosystem, over 80% of investors in early-stage startups believe that funding activity in 2023 is likely to be slower compared to last year, according to a report by venture debt firm InnoVen Capital.

Details: As per the report, almost 40% of the investors surveyed reported a decrease in the number of deals they had closed.

Trends in early stage investment_Graphic_ETTECH
Data from Venture Intelligence shows that during January-March, seed and series A investment rounds saw $712 million in funding, less than half of the $1.92 billion recorded in the same quarter last year, in line with the InnoVen report.Funding activity expectation for 2023_Graphic_ETTECH
Quote, unquote: “When the market is hot, you always get some founders who are looking for quick success and instant gratification. Investors believe that the market will go sideways, with a negative bias and they are looking for founders who are ready to get into the trenches, and build for the long term, even if the funding environment remains tight,” Ashish Sharma, managing partner at InnoVen Capital, told ETtech.Investor expectation for top 3 sectors of 2023_Graphic_ETTECH
State of play: ETtech reported earlier this month that early-stage startups that were earlier deemed immune from the funding winter have also seen a decline in funding during the first quarter of 2023.

ONDC to evaluate online retailers based on commitment: CEO Thampy Koshy

Thampy Koshy
Thampy Koshy, the chief executive of the government-backed Open Network for Digital Commerce (ONDC), said they would continually evaluate the performance and commitment of any platforms joining the network with respect to their contribution. This comes a day after industry and commerce minister Piyush Goyal suggested excluding ecommerce firms whose main platforms don’t onboard ONDC.

Also read | Exclude ecommerce firms whose main platforms don’t onboard ONDC: Piyush Goyal

Why this stance? On Tuesday, Goyal said, “A few days ago, there was a company that had created an ONDC-specific platform. That’s exactly what we don’t want to happen. Be on ONDC through your main platform”. It is not clear which company Goyal was talking about.

Total commitment: A source from ONDC said, “The thought process behind what the minister said was that there should be no platform, not just Bengaluru-based, but also Big Tech, which should join ONDC without total commitment.”

PhonePe, for example, has been asked to provide a plugin to Pincode in their application to make it visible to all its customers, the source added.

Tweet of the day

HC issues notices on Google’s plea against ADIF order

Google CCI investigation_THUMB IMAGE_ETTECH
A division bench of the Delhi High Court on Wednesday issued notices in Google’s appeal against a single-judge order directing the CCI to take up the complaints by a section of Indian startups against the tech giant’s new in-app purchase billing system.

Background: ETtech reported on Tuesday that Google has appealed the single-judge order, which had asked the CCI to consider the complaints on or before Wednesday (April 26), the date on which the user choice billing system becomes effective. Meanwhile, on Tuesday, the CCI called the concerned parties to hear the matter and asked them to submit documents to support their arguments.

Also read | ETtech Explainer: How complaints by Indian startups against Google brought CCI’s adjudicatory abilities under the scanner

The complaints: The Alliance of Digital India Foundation (ADIF) had filed a plea with the court earlier this month seeking an urgent CCI review of Google’s new in-app purchase billing system. It alleged that Google was engaging in anticompetitive conduct by implementing the new policy. ADIF alleged that the competition watchdog’s “inaction” on the tech company’s new billing system had resulted in Google engaging in antitrust practices.

Other Top Stories By Our Reporters

Gaming rules
AIGF moves Madras HC seeking stay on gaming law: Gaming industry body AIGF (All India Gaming Federation) has moved the Madras High Court seeking a stay on Tamil Nadu’s gambling law which came into effect on April 21. The petition also alleges that the reasons Tamil Nadu gave to bring the law were ‘fallacious’.

India among top nations asking to remove Twitter content: India was among the top requesting countries to remove content last year, Twitter said on Tuesday adding it received about 53,000 legal requests to remove content from governments across the globe from January 1 to June 30, 2022.

Global Picks We Are Reading

■ Apple’s Weather chaos is restarting the weather app market (The Verge)

■ Lawmakers Want to Ban TikTok. Here’s What Users Say Is at Stake (NYT)

■ Twitter’s Verification Fiasco May End in Court (Wired)





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