Mass layoffs won't make hiring easy for startups in the future!

While startups like Zomato, Housing and TinyOwl are letting their employees go as part of their ‘global restructuring’ or shrinking funds, experts warn that these layoffs could infact have an effect on the hiring system of India’s emerging business.

"Startups are a risky business, many of them fail," K Ganesh, founder of entrepreneurship platform Growth Story told ET. But "when a crisis hits, it needs to be handled maturely."

Indian startups which require thousands of engineers and other skilled workers now compete with large technology companies for talent.
According to experts, as online social media forums become venting grounds for laid-off employees and draw wide attention, startups face reputation risk that can cause serious damage to future hiring plans.

At TinyOwl, two cofounders were held hostage by employees last week after they sprung a surprise second round of layoffs a week ahead of Diwali — ridding more than 300 personnel in about two months. Zomato in October laid off about 300 employees, many of them in the US, and Housing has sent away about 600 people this year.

"I was asked to submit my access card when I arrived at the office," said an employee of a Gurgaon-based startup. "The CEO did not even bother to offer an explanation." Layoffs over emails, town halls or through press releases at short notices before a festival betray immaturity, human resources experts said.

"India's culture is yet to adapt to the hire-and-fire mentality as there no social security like in the West," said Ravichandar. "Startups should learn to do more with less."

Experts advised setting expectations at the time of recruitment at a startup, such as asking prospective employees if they were open to such risks even before handing them the offer letter.

Image credit: Indiatimes