Layoff fallout: Outplacement firms have their hands full with flood of CVs

Tough trade-off: Companies want job guarantee for people they've laid off, but on a bargain

It is a busy time for outplacement agencies and job portals in India. The funding chill that has set in for the start-up universe this winter and the fears of a possible global recession that have gripped the IT sector have pushed thousands back into the job market.
 

Over 23,000 have lost their jobs in the start-up world alone since the pandemic began in 2020, according to staffing firm TeamLease. As many as 15,216 have been laid off by 44 start-ups, including unicorns, the firm adds. Among these were 14 edtech start-ups, which have let go of 6,898 people in 2022 alone.
 

The sacking season, however, isn’t over yet. Of late, conversations among human resources (HR) professionals have been about the number of promising resumes likely to be up in the job market in the weeks and months to come.
 

The layoffs in the past two quarters have accelerated the number of job seekers, says Akhil Gupta, CEO of recruitment portal Shine.com. At Bengaluru-headquartered talent solutions provider Careernet, the response to job openings has increased by 10 per cent between the last quarter and the current one.
 

“We have seen an uptick of about 20-25 per cent in direct job applications and the referral scheme programme on the website, which allows people to refer their friends who have been impacted by the layoffs,” says Anshuman Das, Careernet CEO and co-founder.
 

To build morale and help recruits work on their technical skills, these portals are now spearheading newer initiatives. For instance, Shine.com has been conducting coding hackathons where candidates can showcase their skills and get noticed by potential employers.
 

Careernet has been hosting practice exams on its coding website that job-seekers can take to see where they stand and polish their skills. The portal is also helping tweak resumes to better suit the demands of the current job market; assisting in interview preparation; and guiding recruits to position themselves more effectively.
 

It is not an easy time – neither for employees who have got the pink slip nor for outplacement agencies.
 

Portals like Careernet say while demand has increased for their formal outplacement services, where they engage with candidates with the consent of the company, this demand isn’t really coming from the start-up sector, which has laid off the maximum number of people.
 

“A lot of these layoffs are happening because of the funding crunch, and not because people are not skilled enough or their skills are outdated,” says Das. “So they might not get a job immediately or even one at the same salary, but maybe a little later on a reduced salary.”
 

There’s another hurdle. Outplacement agencies say some companies are demanding a guarantee that each of the impacted employees would land a job.
 

“We are currently not handling any outplacement demand because there are simply too many mandates,” says Vijay Karkare, Managing Director, Cornerstone, a Delhi-based outplacement agency. “While the outplacement market is booming, we are facing trouble with companies, which want a full guarantee of employment for the people they have laid off.”
 

“There is also the issue of stinginess,” he adds. “These companies want a full guarantee, but are also bargaining a lot for the price of our services.”
 

Some start-ups, after having sacked many of their employees, are, meanwhile, trying to help them find another job.
 

Last week, OYO Founder and Group CEO Ritesh Agarwal made news when he took to LinkedIn to urge people to help find jobs for the employees OYO had laid off. “Many talented OYOpreneurs are having to part ways with OYO. For companies that are hiring in tech, reach out to us at talent@oyorooms.com and we will share a directory for rehiring our outgoing employees,” he wrote.
 

According to a company statement, OYO will be downsizing 10 per cent, cutting 600 jobs.
 

“Senior leaders at OYO are proactively reaching out to their circle of contacts to seek support for their outplacement, and we are amplifying the same through social media as well,” Agarwal tells Business Standard.

“We have created a directory of outgoing employees and will be sharing it with companies and people who are showing an inclination to hire these very talented individuals,” he says, adding, “I am proactively endorsing the skills of these talented individuals who have made valuable contributions to OYO. We will also ensure that when new roles and positions arise, we will reach out to them first to check their interest in joining us back.”

Edtech major Byju’s, which is expected to sack 2,500, or 5 per cent, of its 50,000 employees as part of an “optimisation” plan amid steep losses, also says it is trying to find them jobs. In June, Byju’s had laid off about 600 employees at its group companies, WhiteHat Jr and Toppr.
 

“We understand this is a tough situation; to make this less painful, we have created a dedicated outplacement team that will help the affected employees get a suitable job,” says a Byju’s spokesperson.
 

The company says it has decided to extend the insurance benefits of the affected employees and their families by six more months. “The employees can also keep the company assets till they need them. There is also a provision for garden leave, which will help our employees apply for jobs while being on our payroll,” the spokesperson adds. Like OYO, Byju’s says it, too, will re-hire the laid-off personnel if they don’t land a job “within 12 months of their date of separation from us”.

At rival Unacademy, which is conducting another round of job cuts and laying off 350 employees, or 10 per cent of its workforce of 3,500, a placement support system has been put in place. Unacademy claims it is ensuring job interviews and placements for every employee who signs up for the placement support. In April, the firm had laid off about 1,000 employees.

While the sector continues to see chaos, Das is of the view that high salaries are increasingly becoming a problem area. “There is a segment that has been paid very highly in the last two years — something that didn’t happen earlier,” he says. “There’s a serious salary correction waiting to happen.”

On the lookout

• Over 23,000 start-up employees laid off since 2020
• 15,216 sacked by 44 start-ups, including unicorns
• Response to job openings up 10% between last quarter and this one at Careernet
• 20-25% uptick in direct job applications and referral scheme programmes at Careernet
• Job portals hosting hackathons, practice exams, tweaking resumes to meet market demand
• Outplacement agencies say many firms demanding guarantee of employment for their impacted employees