Vedantu Lays Off 424 Employees, Cars24 Fires 600

India’s two-year-long startup party appears to finally be coming to an end — and the hangovers aren’t looking pretty.

Two startups which were recent entrants to India’s unicorn club have fired large numbers of employees in the last two days. Ed-tech company Vedantu had yesterday fired 424 employees, which represented 7% of its workforce. Used-car marketplace Cars24 has today fired 600 employees, which represented nearly 6% of its workforce.

“Currently, the external environment is tough,” Vedantu co-founder Vami Krishna wrote in a blogpost. “War in Europe, impending recession fears, and Fed interest rate hikes have led to inflationary pressures with massive correction in stocks globally and in India as well. Given this environment, capital will be scarce for upcoming quarters. With Covid-19 tailwinds receding, schools and offline models opening up, the hyper-growth of 9-times Vedantu experienced during the last 2 years will also get moderated. For long-term sustenance of the mission, V (Vedantu) would need to adapt too,” he added.

Vedantu’s layoff of 424 employees yesterday follows it laying off 200 employees just two weeks ago, taking its total layoffs to over 600 this month. Things had been very different for Vedantu just a few months ago — it had become a unicorn in September 2021, and had seen its valuation soar 4x over the the previous year. The company had also embarked on an ambitious marketing campaign, having signed on Bollywood star Aamir Khan and running ads during the IPL.

Cars24, for its part, had become a unicorn in November 2020. It has now gone ahead and fired 600 employees across departments from its workforce of 9000. Unlike Vedantu, Cars24 doesn’t blame the external environment for its layoffs. “This is business as usual performance-linked exits that happen every year,” the company said in a statement.

But Vedantu and Cars24 aren’t the only startups that have laid off large numbers of employees in recent months. Last month, ed-tech unicorn had laid off 1,000 employees, and e-commerce unicorn Meesho had fired 150 employees as well. Trell, Lido Learning, and Furlenco have all fired more than a hundred employees each in recent weeks.

Things had been very different until last year — startups had been flush with capital, and instead of conducting mass layoffs, were hiring employees with unheard-of perks and record salary packages. But the business environment has changed since then — tech stock across the world have crashed, funding has dried up, and there are hushed whispers of an oncoming slowdown. Startups are now looking to conserve their costs as they find themselves in increasingly choppy waters, and seem to be revising their once-rosy growth projections. It remains to be seen how long this startup winter will last, or how severe it’ll end up being, but it’s becoming increasingly apparent that it’s well and truly upon us.