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Tech Sector To Face More Hardships In 2023: Gaurav Munjal

The Unacademy founder's tweet comes at a time when Indian start-ups are struggling to raise capital at a proper valuation and laying off their employees to stay profitable

Tech Sector To Face More Hardships In 2023: Gaurav Munjal
Gaurav Munjal, co-founder and CEO, Unacademy
Gaurav Munjal, Twitter
POSTED ON November 30, 2022 10:40 PM

Gaurav Munjal, chief executive officer and co-founder of the edtech platform Unacademy, tweeted that 2023 would be worse for tech companies compared to 2022. 

His tweet came at a time when multiple tech start-ups in India are struggling to raise capital at a proper valuation and laying off their employees to keep the companies on profitability track. Unacademy itself had sacked 350 employees recently to reduce costs.

In the edtech sector, Byju’s announced the possible rationalisation of its 50,000-strong employee bandwidth in a phased manner, which means laying off 2,500 employees in the coming months. Bengaluru-based unicorn Vedantu also laid off its employees. 

Tech layoffs have been one of the most centrally discussed issues in current times. Kalyan Krishnamurthy, CEO of Flipkart recently said at an event that the next 12 to 18 months is where there is likely to be a lot of turmoil and volatility. "Post which I think things will be much better," he noted. 

"In 2021, companies saw a spike in the valuation of two times to six times with some underlying assumptions for the next two to three years. I think very quickly it was clear that those assumptions are not going to play out, whether it is on growth or profitability," he further added. 

At the same event, Harsh Jain, co-founder and CEO of Dream Sports, also addressed the layoff issue. He said, "We need to have that 2008 kind of mindset, where you cannot count on funding six or 12 months down the line. I mean we can't be non-profitable forever." 

The global situations are also similar to India. Big tech players such as Meta, Microsoft and Twitter are cutting employee band bandwidth to combat the economic downturn. After the successful takeover by Tesla CEO Elon Musk, Twitter fired 7,500 employees. Meta also laid off 13 per cent of its entire workforce. 

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