Economic Survey: Start-up jobs increase 6x even as funding declines

Tracxn data shows that investments in domestic start-ups declined by 38.8% to $25.8 bn in 2022

Although funding declined for start-ups in 2022, data from the Economic Survey 2022-23 showed that the number of jobs created by the Department for Promotion of Industry and Internal Trade (DPIIT)-recognised start-ups increased sixfold from 43,000 in 2017 to 269,000 in 2022.

As start-ups faced a funding winter, investments in domestic start-ups declined by 38.8 per cent to $25.8 billion in 2022 from $42.1 billion in 2021, shows data from Tracxn technologies. A similar trend was seen in other countries. Among the nine countries for which data was available, the decline in funding was the highest in Indonesia at 66.2 per cent, followed by China at 61.2 per cent.

Start-ups in Germany witnessed a decline of 51.3 per cent in funding. It was 38.6 per cent for the United States and 21.8 per cent for the United Kingdom.

As a result of the funding winter, layoffs at start-ups are likely to rise.

Media reports show that nearly 2,000 employees were laid off by start-ups in the first few weeks of January.

ShareChat, the social media platform, laid off 20 per cent of its workforce. Online food aggregator Swiggy let go of 380 employees, about 5 per cent of its workforce.

However, the impact of the funding winter has not been restricted to start-ups. Tech giants too have announced job cuts — Microsoft has said it will lay off 10,000 employees, Amazon said it will let go of 18,000 staffers, and SAP announced that it would lay off 3,000 employees.