Startups start hiring employees sacked by peers
NEW DELHI: Freshly laid off employees in the startup sector are being eyed by new startups seeking to hire experienced talent in analytics, marketing, academics and technology areas at comparatively more affordable costs.
Startups and recruiters say hiring retrenched talent is a cheaper option, crucial when a funding crunch has engulfed the startup ecosystem.
There has been hiring across sectors such as edtech, fintech, and healthtech which have been hit the most by the current liquidity squeeze and have been witness to significant layoffs. Notably, hiring is also being done by startups that have only raised early-stage funding so far.
Preet Pal Thakur, co-founder, Glamyo Health, which raised Series A funding last September, said his firm is looking to absorb superior talent laid off by others.
“The good quality talent which earlier was not available is available to us at reasonable cost, so we don’t have to pay 1.5-2x on their previous salary,” he added.
The company aims to double its headcount in the next six months from the around 300 employees currently.
“If you have a fundamental strength in your business, it is good time to stack up your talent resource pool which will put you in good stead in the next 12-18 months,” he said.
The sudden availability of talent comes at a time when venture capital-backed startups have laid off around 6,000 employees since the start of this year, according to VCCircle analysis. The hiring frenzy seen post two years of the pandemic due to increased digitalization has slowed as many cash-guzzling startups saw their finances deplete with investors sharpening their focus on profitability.
“We have placed 30 candidates who were earlier laid off in the last three months. Those who have a prowess in the tech, marketing and analytics-based roles,” said Ravi Wadhwa, founder, Talentiser-a startup-focused recruitment firm. Wadhwa said employees in middle management roles were placed, those in junior roles may see fewer takers as they are still to have defined skill sets.
Also, those from the edtech sector, which has let go of 3,400 employees since January, may have to take a pay cut since their salaries were inflated during the boom in online teaching over the last two years.
“Up to 5-10% of our placements over the last few months are candidates who were laid off. While startups took them at a flat rate, those who went to legacy firms took a 20-30% pay cut. These were profiles of development operations, marketing,” said Aditya Narayan Mishra, director and chief executive officer at Ciel HR Services.
To be sure, several VC-backed startups are either hiring or are in the process of recruiting a section of the employees laid off by their peers in the industry, underling the startup story is still quite strong.
Edtech startup Filo said it won’t follow the examples of others and will instead seek to offer raises to retrenched workers it plans to hire.