Why are well-funded startups beginning layoffs?
                     WHY ARE WELL-FUNDED 
STARTUPS BEGINNING 
LAYOFFS?
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WHY ARE WELL-FUNDED STARTUPS 
BEGINNING LAYOFFS?
Startup layoffs are not a 
new phenomenon, they 
have been a regular part of 
the start-up life cycle and 
not just a symptom of 
shrinking startup funding.
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WHY ARE WELL-FUNDED STARTUPS 
BEGINNING LAYOFFS?
Experts are now flagging 
concerns over the speed at 
which companies are 
rationalizing their business 
verticals and burn rates by 
trimming down their 
workforce and certain 
startups firing employees. 
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WHY ARE WELL-FUNDED STARTUPS 
BEGINNING LAYOFFS?
It may even result in 
consolidation and an 
increase in demand for 
venture debt. The following 
are some of the reasons; 
why startup firms are firing 
employees. 
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THE CONSOLIDATION 
PHASE
At some point in time, most 
startups around the world 
will usually face a funding 
crunch. In a market that has 
witnessed an upsurge in 
high-potential startups, 
cash flow becomes crucial 
and all companies need to 
have a good plan in place to 
tackle such situations. 
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THE CONSOLIDATION 
PHASE
The big question right now 
is, how many of these 
startups will survive and 
learn from their mistakes? 
At some point or the other, 
every startup in the world 
will face some kind of 
funding crunch. 
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THE CONSOLIDATION 
PHASE
Some firms are firing 
employees in 2022 due to 
reasons like business 
slowdown due to the Ukraine 
and Russia war and other 
macroeconomic factors. 
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THE CONSOLIDATION 
Other rPeHaAsSoEns include business 
slowdown and the duplicity of 
talent since the companies had 
taken over several smaller 
companies and hence they need 
to consolidate by reducing 
excess manpower and 
especially unproductive 
employees and excess people 
having similar skills. The 
companies also reduce 
expenditure by spending less on 
additional stationery products 
and equipment like compuwtwewr.dse sertcart.in
and office furniture.
IMPACT OF CORONAVIRUS (COVID-19)
The Covid-19 pandemic 
situation has had a devastating 
effect on different types of 
businesses around the world.
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IMPACT OF CORONAVIRUS (COVID-19)
While there is still hope that we 
can recover from the 
consequences of this pandemic, 
there is no doubt that 
businesses continue to suffer for 
some more time. It is not yet 
clear how long this crisis will 
last, or how much damage it will 
do to the economy as a whole.
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IMPACT OF CORONAVIRUS (COVID-19)
While the biggest impact of 
Covid-19 has been felt in the 
travel, hotel, and tourism 
industry as well as in healthcare, 
certain sectors have also been 
affected by this economic 
slowdown. 
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IMPACT OF CORONAVIRUS (COVID-19)
With companies laying off more 
than 100 employees at once, 
the need for reskilling and 
rebranding has never been 
higher; especially for 
professionals looking to find new 
jobs in startups.
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DO SUDDEN LAYOFFS AFFECT THE 
COMPANY’S BRAND IMAGE?
Sudden layoffs, which come with 
no prior information or post-
information, definitely impact 
employer brands. It puts fear in 
both existing and future 
employees, and results in 
negative comments on team 
member feedback sites like 
Glassdoor, severely impacting 
the employer's reputation as a 
good employer.
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DO SUDDEN LAYOFFS AFFECT THE 
COMPANY’S BRAND IMAGE?
A well-funded company is 
expected to do its planning and 
preparations perfectly. Sudden 
layoffs generally demonstrate a 
lack of proper planning and 
strategic goal setting. However, 
many layoffs are usually 
initiated by non-strategic 
investors, who are only 
interested in the short term due 
to a myopic view. 
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DO SUDDEN LAYOFFS AFFECT THE 
COMPANY’S BRAND IMAGE?
However, the ultimate 
responsibility lies with the 
investee company. The existing 
employees too may begin to 
feel insecure and restless; when 
companies initiate layoffs. There 
is a general sense of despair 
and demotivation that affects 
the entire business.
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