Ruthless layoffs won't make hiring easy for startups

1. Ruthless Layoffs won't Make
Hiring Easy for Startups
Layoffs over emails, town halls or through press releases at short notices
before a festival show immaturity, human resources experts say

2. Contd…
As startups including Zomato and TinyOwl let go of employees because of changed
strategies or shrinking funds, experts warn that the recent rush of layoffs could
undermine hiring for India's emerging businesses. “Startups are a risky business,
many of them fail,“ said K Ganesh, founder of entrepreneurship platform Growth
Story. But “when a crisis hits, it needs to be handled maturely.“
Indian startups requiring thousands of engineers and other skilled workers now
compete with large technology companies for talent. But as online social media
forums become venting grounds for laid-off employees and draw wide attention,
startups face reputation risk that can cause serious damage to future hiring plans,
experts warned.
“Decisions about layoffs should be conveyed in a cascading manner,“ said Hema
Ravichandar, independent human resources adviser and former global HR head at
Infosys. “Such decisions at the time of festivities may have a lasting impact on
future hiring.“

3. Contd…
At TinyOwl, two cofounders were held hostage by employees last week after they
sprung a surprise second round of layoffs a week ahead of Diwali -ridding more
than 300 personnel in about two months. Zomato in October laid off about 300
employees, many of them in the US, and Housing has sent away about 600 people
this year. HelpChat is laying off about 150 employees, and online grocery retailer
LocalBanya is also asking people to leave.
“I was asked to submit my access card when I arrived at the office,“ said an
employee of a Gurgaon based startup. “The CEO did not even bother to offer an
explanation.“
Layoffs over emails, town halls or through press releases at short no tices before a
festival betray immaturity, human resources experts said.
“India's culture is yet to adapt to the hire-and-fire mentality as there is no social
security like in the West,“ said Ravichandar. “Startups should learn to do more with
less.“

4. Contd…
Experts advised setting expectations at the time of recruitment at a startup.
“Even before you hand over an offer letter... ask if the person is open to such
risk,“ said Harish Kumar, CEO at human resource consultancy Wenger and
Watson that counts Flipkart and Amazon among clients.
Startups often also lack the expertise to handle layoffs as do large
companies. “In big companies, we have outplacement strategies and experts
to blunt the impact of a layoff,“ said Ramgopal Rao, president at executive
search firm Steinbach & Partner. “They would counsel laid-off employees
and help them polish their CVs.“
Even so, not all startups are resorting to knee-jerk downsizing.Struggling
food ordering app SpoonJoy, which in October agreed to be bought by
hyperlocal delivery startup Grofers, sent daily updates on its crisis, softening
the eventual blow to employees.

5. Contd…
“From the data-entry guy to the head of engineering, we were very
transparent about our situation,“ said Manish Jethani, cofounder and
CEO. “We also got about 200 of our delivery staff placed in other
companies such as Roadrunnr, Shadowfax and other agencies.“
Ganesh of Growth Story took a similar approach at an earlier venture,
TutorVista.
“When we had to let go of onethird of our staff at Tutorvista (during
the global economic crisis) in 2008, I addressed the employees
personally. We gave them three months' notice even though one
month was the norm,“ said Ganesh. “A few months later when things
got better, we actually hired half of the people back.“

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