MAM
Why startups facing strong headwinds with massive layoffs
MUMBAI: Social commerce startup CityMall became the latest startup to announce mass lay-offs. In a LinkedIn post on 19 June, the firm said that it has laid off 191 employees alluding to the current funding environment and a change in its business model as reasons. In addition, SoftBank-backed Unacademy laid off another 150 employees last week, after letting go of around 600 employees or 10 percent of its workforce in the beginning of this year. Around the same time, Coinbase sacked about 8 percent of its India workforce, amid a crash in digital assets. While crypto companies have taken a hit in 2022 because of uncertainties revolving around their legal validity in India, they aren’t the only ones to feel the chills of a market meltdown.
Several Indian startups seem to be on a lay-off spree currently, after the hiring augmented for a brief period, leading to thousands of workers staring at an uncertain future amid heightened inflation & economic downturn, thereby, adversely impacting startups in the recent months. Startups that issued pink slips this year included unicorns such as Vedantu (laid off 642 employees in May), Cars24 (laid off 600 in May), Ola (laid off 1,200 earlier this year), Meesho (laid off 150 in April), MPL (laid off 100 in May), Trell (laid off 300 in March) and Unacademy (laid off 750 over the last few months).
So far, over 10,000 employees have been laid off by 24 startups, based on media reports. The new-age sectors which have witnessed the maximum layoffs are edtech and ecommerce. Just a year back, several of these new companies were hiring robustly, offering ambitious pay packages, having raised intense funding, and expanding vigorously.
Furthermore, Indian startups were the largest spenders during the IPL season, even leaving the heavyweight FMCG brands far behind in its ad spends. It is noteworthy that all the official sponsors of IPL this season comprised only startups. These majorly included fintechs and edtechs, such as Unacademy, Upstox, RuPay, and CRED, apart from Swiggy Instamart & Dream11, with each official sponsor shelling out excessive moolah.
Gaming platform Mobile Premier League (MPL) was the official kit sponsor for the Indian Cricket Team while edtech brand, Unacademy was the official partner of IPL 2022 and sponsor of Kolkata Knight Riders team. E-comm brand Meesho was the sponsor of IPL’s official broadcaster Star Sports and the Gujarat & Rajasthan teams.
What kind of challenges the Great Indian Startup is facing? Is the party finally over for startups? What is the current market scenario? Will startups recover and increase hiring in future? We spoke to the experts to understand the current situation of the market and future growth?
According to Talent acquisition marketplace, FlexC founder and CEO Girish Kukreja said that most of the startups witnessed a sharp surge in demand for their products and services, when Covid was at its peak. “The market trend then showed a very bright upward growth. It multiplied the demand for human power to cater to the needs of current users and attract more consumers to the business. But most of these employees were hired probably in haste, with little to no solid plans for managing the growth and succession planning of these employees within the organisation.”
However, when things moved to the pre-pandemic world, so did consumer’s behaviour also changed in many aspects. It, therefore, resulted in a setback for these firms. Hence, the layoffs happened, Kukreja believes.
After a funding blitzkrieg that lasted for nearly two years, venture capital investments globally have gone down as technology valuations have taken a hit in 2022 in the post-pandemic economic situation, coupled with inflation and international unrest. As the startup ecosystem braces for a funding winter and subsequent slowdown, it is increasingly becoming clear that most of the players in the space hired too many & too soon.
Despite that, Kukreja does not believe that it’s all over for ‘the great Indian startup party’. “In terms of overall startup employment, the current layoff numbers reported are a minor percentage- possibly five to ten per cent,” he states, adding, “Making mistakes and learning along the way is a part of every startup’s journey. The only mistake these startups made at that point was to hire many permanent employees.”
The startup culture in India is pretty resilient and it will adapt & get back on track in no time, he says, citing the example of an edtech startup called Physics Wala that entered the unicorn club amid the layoffs.
Some of these online-first edtech startups, such as BYJU’S and Unacademy are also reinventing themselves by moving to a hybrid model, with plans to open offline coaching centres, blending their online and offline teaching models.
Several others have also resorted to curtailing expansion plans by closing down non-core verticals, moderating marketing and advertising spends, while going on a hiring freeze to tide over the bleak phase.
Grapes CEO & cofounder Shradha Agarwal attributes the “mass layoffs” phenomenon against the startups experiencing a funding peak in 2021 to “the unplanned hiring spree in the rush to onboard talents”.
“To achieve immediate results, startups experiment with new approaches that often misguide the management to formulate inadequate growth analysis. As a result, they expand into new growth plans and venture into new verticals which fails due to an unrealistic approach,” she says. This puts a lot of pressure on the workforce, and companies resort to cutting down on human resources as the only viable solution owing to its easily controllable factor compared to the other fixed costs, which are beyond their hands, Agarwal adds.
Despite the glitch in the framework, the startup culture is there to stay given its business nature, Agarwal believes. “The industry is versatile where it has the ability to change and mould its business models according to the market conditions.” The startups must focus on proper recruitment strategies with specific skills hiring for longer sustainability, rather than being concerned about short-term goals, she states.
Staffing solutions provider, Gi Group Holding India country manager Sonal Arora does not see the layoffs being witnessed in recent times as necessarily being a sign of troubled times ahead for the Indian start-ups ecosystem. “Some of these start-up companies across various industries are in a process of consolidating their workforce. It is a strategic step that every organisation aiming to expand adopts,” she states. “In some cases, they have matured in terms of their business model and decided which are the products/ services they want to focus on, which will eventually result in better or improved services.”
Experts highlight that layoffs are not a new phenomenon and have always been a part of various industries, considering that the layoffs are happening at a large scale around the same time in several startups is what has garnered a lot of attention.
According to Arora, India continues to be the centre of emerging technologies. “This means that in the future we will continue to attract various series of funding and interest from venture capitalists,” she concludes.
When you plan to buy medical insurance for your family, the first question is often about savings. You may assume that buying online automatically means paying less, but that is only part of the picture. The real issue is not just whether the premium looks lower, but whether the policy gives you suitable family health insurance without adding avoidable costs later.
Buying online can sometimes appear more budget-friendly because you can compare plans, review features, and complete the process without depending entirely on offline assistance.
Still, a lower visible price does not always mean better value. To understand whether you can truly save more, you need to look at the full buying experience and the policy terms together.
Why Online Purchase Can Look More Economical
When you explore family health insurance online, you usually get access to plan details in a more direct and organised way. This can make the buying journey feel simpler and more transparent.
A few reasons online purchases may seem cost-effective include:
● Easier comparison of policy features
● Direct access to premium details
● The ability to review inclusions and exclusions at your own pace
● Fewer chances of making a rushed decision
● More control over the plan selection process
This does not mean every online option is automatically cheaper. It simply means the online route may help you assess choices more carefully, and that itself can influence how much value you get from the policy you choose.
Saving Money is Not Only About a Lower Premium
A lower premium often catches your attention first, but that should not be the only measure of savings. If you buy medical insurance based only on what looks affordable at the start, you may overlook conditions that matter later.
A family health insurance policy should be judged on overall value, including:
● The scope of cover
● Waiting period terms
● Exclusions
● Room eligibility conditions
● Sub-limits, if any
● Claim-related terms
● Renewal conditions
If the premium is lower but the policy has stricter internal conditions, the apparent saving may not feel meaningful when you actually need hospitalisation support.
So, the better question is not only whether online purchase costs less, but whether it helps you select a plan that remains financially sensible over time.
Comparing Plans Online Can Prevent Overspending
One clear advantage of the online route is that it allows you to compare different options without pressure. This can help you avoid paying for features you may not need or missing features that matter for your family.
Before you buy medical insurance online, look closely at:
● Who can be covered under the plan
● How the sum insured works for the family
● Whether day care procedures are included
● How pre-existing illness rules are explained
● Whether add-ons are optional or built in
● How clearly the policy wording is presented
This level of comparison can support better decision-making. In many cases, savings come not only from the premium itself but from choosing a policy with fewer surprises.
Online Discounts Should be Viewed Carefully
Online discounts can make a plan look attractive, but they should always be read alongside the policy details. A discount may reduce the upfront cost, yet the true worth of the policy depends on what it covers and how it responds during a claim.
When reviewing discounted online plans, check whether the policy has:
● Treatment-specific limits
● Room rent restrictions
● Co-payment clauses
● Disease-wise waiting periods
● Claim deductions linked to the hospital category
● Limited cover for selected benefits
These points are important because a policy that looks cheaper at purchase may involve more out-of-pocket spending later. That is why discount-led buying should be replaced with detail-led buying.
Final Thoughts
Yes, buying online can sometimes help you save more when choosing family health insurance, but only if you look beyond the headline price. The online route may give you better visibility, easier comparison, and more time to review the policy terms.
That can support smarter choices and may reduce the chances of paying for a plan that does not suit your family well.
If you want to buy medical insurance online, treat savings as more than a discount. The real advantage lies in choosing family health insurance that balances affordability, clarity, and meaningful coverage for your household.
