Among startup layoffs, IT companies plan increases of 8-10%.

After a record year in 2021, the Indian startup ecosystem has seen very few large funding deals in recent times. This has prompted several new age companies, from Unacademy to Meesho, to lay off employees as they try to cut costs and get back to basics now that the Covid-fueled funding party is truly over.

So in this letter:
■ IT companies are likely to roll out wage increases of 8-10% during this fiscal period
■ Flipkart opens the logistics arm to other ecomm companies
■ Freedom of speech must be consistent with the law: Musk


Layoffs come into play in startups as large funding rounds dwindle

lay off

Big funding rounds are few and far between these days, then startups are trying to cut costs by eliminating staff.

Layoff Season: In recent weeks, more than 1,800 full-time and contract employees have been laid off from:

Sources told us that some of these companies may be looking to cut even more jobs as the trend is likely to develop further.

Investors have begun asking high-growth companies to go back to basics – chasing profits and reducing their money consumption, several insiders said.

Start-up layoffs increase in 2022

We spoke to several startup founders, investors, and analysts for this story. All said the layoffs involve late stage startups with high valuations and significant cash consumption that are seeing a marked reduction in funding rounds from $ 100-150 million.

The exuberance fades: Four unicorns were minted in India in March and April, up from 10 in the same period last year. No new unicorn rounds have been announced so far this month, about eight in April 2021. Last year was a record year for startups, with 40 new unicorns.

Stick to the basics: In this new financing environment, companies will be more wary of taking risks and retain their core competency, said Rahul Chowdhri, co-founder and partner of Stellaris Venture Partners, an early stage investor in brands such as Mamaearth, Whatfix, Shop101 and Slintel. .

“Indian startups have seen such cycles in the past and this is perhaps the fourth time in the past 15 years that such a correction has occurred,” he said.


IT companies are likely to roll out wage increases of 8-10% during this fiscal period

Information technology

Indian IT companies are likely to raise annual salaries 8-10% for local employees in this fiscal year while the industry faces an unprecedented talent crisis and dropout rates of 17-28% in companies like TCS and Infosys.

In the context: This compares with a 10-12% salary increase last year, but is still among the highest in recent times.

“The FY23 cycle will remain one of the highest for IT employees in terms of salary increases,” said Kamal Karanth, co-founder of Xpheno, a company specializing in staffing. However, “they (companies) realize that the compensation increase is not sustainable in the long term and their balance sheets are already showing the impact.”

This comment is echoed by the C-suite executives. Apparao VV, director of human resources at HCL Technologies, told us that the company plans to introduce wage increases in July, similar to the 7-8% range offered in fiscal 22.

Experts pointed out that an 8-10% increase could be the threshold as long as IT companies continue to project a solid demand environment.


Flipkart opens the Ekart logistics arm to other e-commerce companies

flip the paper

Flipkart has opened its Ekart internal logistics arm to other e-commerce players, people informed about the matter told us. Flipkart Group CEO Kalyan Krishnamurthy also discussed it Wednesday at a company town hall, the sources said.

This means that orders for companies such as Nykaa, FirstCry and others may someday be delivered by Ekart.

“The opening was phased in from January onwards and now has around 30 companies including Snapdeal and others,” said one of the sources.

Sources from third-party logistics companies also said Ekart held talks with several e-commerce platforms to meet their shipments. “It looks like they are getting serious this time,” said an executive from a logistics company.

Second try: Before being acquired by Walmart in 2018, Flipkart had once tried to open Ekart to small-scale external platforms, but the project was not expanded as the company was still trying to better meet its order volumes.

NFT on Flipkart? During City Hall on Wednesday, Krishnamurthy also said that Flipkart was in the early stages of building its non-fungible token (NFT) business. He said this in response to a question from a Flipkart employee about whether the company was looking to introduce web3-related products.

TWEET OF THE DAY


Free speech must be consistent with the law, Musk says

Elon Musk tried to clarify what he meant by “freedom of speech” on Twitter, a day after the social media company accepted its $ 44 billion acquisition deal.

What he said: Musk said that freedom of expression must be consistent with the law and that he opposes censorship that goes beyond the law.

“The extreme antibody backlash from those who fear free speech says it all,” Musk said in a cryptic tweet, referring to his critics.

In a subsequent tweet he added: “By ‘free speech’, I simply mean what corresponds to the law. I am against censorship that goes far beyond the law. If people want less freedom of speech, they will ask the government to pass laws in this sense, effect. Therefore to go beyond the law is contrary to the will of the people “.

Problems ahead of time? “Free speech” has been at the fore of Musk’s stated plans for the social media platform. But several experts have told us the Tesla CEO’s $ 44 billion takeover bid for Twitter it could lead to more clashes with governments in countries like India, where free speech is not as fiercely protected as in the United States.

Then read:Jack Dorsey will take home nearly $ 1 billion once Elon Musk’s Twitter deal is closed


Google says it will focus on accelerating India’s digital growth

150 million people in 40 countries using Google Pay: Sundar Pichai

Google will focus on Accelerate growth in India’s digital ecosystem and is “excited to expand partnerships with a number of partners in the region,” the company said during its first quarter earnings call.

Sundar Pichai, chief executive of the US-based search giant and its parent, Alphabet, told analysts that his work in India has helped develop and launch Google Pay globally.

Google Pay, the payments arm of Google, launched as Tez in September 2017 in India and has a significant portion of its customers in India. Currently, 150 million people in 40 countries use Google Pay, Pichai said.

Results Q1: On Wednesday, Alphabet posted 23% year-over-year growth revenue at $ 68.01 billion for the quarter ended March 31. Service revenue was $ 61.47 billion, including advertising revenue of $ 54.66 billion. Cloud revenue was $ 5.82 billion.

Pichai also acknowledged the Play Store policy debate. “We’ve made changes to our Google Play pricing model to help all developers on our platform succeed,” she said. “Today, 99% of developers qualify for a service fee of 15% or less. While this has affected our short-term results, we believe it is the right long-term approach to supporting the ecosystem and being there. ‘Most developer-friendly App Store and game platform available. “


Other main stories from our reporters

Furniture startup WoodenStreet raises $ 30 million in funding led by WestBridge Capital

WoodenStreet Raises $ 30 Million: The Wooden Street furniture and home decor platform has raised $ 30 million in funding round led by WestBridge Capital with a valuation of $ 156 million (Rs 1,200 crore). The fundraising was a mix of primary and secondary investments.

Win-win for banks and new banks: Traditional banks are cooperating new age digital entities known as neo-banks to gain access to young people, tech-savvy clients, according to a report by Redseer Strategy Consultants. He said the collaboration benefits both sides, giving new banks a stronger foundation and traditional banks access to young, tech-savvy clients.


Global choices we are reading

■ Elon Musk bets Twitter users will appreciate a freer platform (WSJ)
■ How Internet blackouts stifled Kashmir’s digital economy (rest of the world)
■ Bitcoin becomes official currency in the Central African Republic (BBC)

Today’s ETtech Morning Dispatch was curated by Zaheer Merchant in Mumbai and Judy Franko in New Delhi. Graphics and illustrations by Rahul Awasthi.

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