Why fire employees? Ashneer Grover enters the debate on layoffs asserting the founders to carry out compensation cuts
Why fire employees? Ashneer Grover enters the debate on layoffs asserting the founders to carry out compensation cuts
Ashneer openly discussed the recent mass firings of thousands of computer workers worldwide. The former CEO of BharatPe wrote on Monday on LinkedIn that he never had to fire employees because of the state of the economy.
He further commented on the latest layoffs in the technology industry stating that every day hearing about layoffs is sad. As the boss, you’ll never hear me say, “I must lay off employees during the recession because I didn’t recruit enough.” Ashneer Grover argued on LinkedIn that foresight is crucial for startup founders.
Ashneer’s statements regarding layoffs
The former Shark Tank India judge and co-founder of BharatPe criticized IT businesses for firing workers in large numbers while expressing gratitude for never having to do so due to weak markets. Grover and his wife Jain left the fintech business in January 2022 after claims of financial irregularities were made public, and they are currently involved in a contentious legal dispute with BharatPe.
He has recently made headlines due to his exclusion from Shark Tank India Season 2, a business reality television program where aspiring entrepreneurs present their business plans to a panel of investors in an effort to convince them to fund their venture.
Grover recommended that businesses take into account a pay cut of 25% to 40% in order to prevent mass layoffs. Grover has already spoken extensively about the idea of “actual salary vs. paid salary” and the necessity for “cost-reducing to lengthen runway” earlier in November of last year.”
The real wage (at which markets clear) at which you were poaching your staff in 2021 was more than the wage you were paying. If you let them go in 2022, the true salary at which they will find employment (if at all) is lower than the salaries you are currently paying.
I just don’t understand why founders choose not to take that route. Energy, money, and technology are all revalued. Why not people, then?” I’m glad I set a cap of 50 participants for the Third Unicorn. People who join me won’t need to worry about anything other than growing and building; I’ve got my team’s back, he continued.
Ashneer Grover has already discussed what prospective employees might anticipate from his business. Mercedes automobiles were offered to employees earlier this month who had worked with Third Unicorn for five years. On his 40th birthday in June of last year, Grover officially launched the firm following his contentious departure from BharatPe, where he was a co-founder.
Big Tech layoffs
Mass layoffs have been announced by a number of major IT companies, including Amazon, Google, Microsoft, Meta, and others. According to recent reports, 91 corporations fired more than 24,000 tech workers in the first 15 days of this month, portending bad times to come. In 2023, approximately 1,600 tech workers would be laid off every day globally, including in India.
Grover’s comments come at a time when numerous employees are being let go by well-known tech companies like Microsoft, Google, Meta, Spotify, Amazon, Twitter, Cisco, and Salesforce. According to a PTI report, since November 2022, these layoffs have impacted 20,000 IT employees.
About 30% to 40% of those impacted are Indian IT professionals, many of whom have H-1B and L1 visas. Not just tech behemoths but even Indian startups were forced to lay off employees as a result of the financial crisis that damaged the startup environment. InMobi, Swiggy, Dunzo, and GoMechanic are a few of the startups that have let go of staff members.
Swiggy reported over 400 job cuts last week and cited macroeconomic factors as the cause. The owner further claimed that because of his over-hiring, hundreds of workers are currently out of work. We are making the difficult decision to lay off employees as part of a company-wide reorganization. In this procedure, we will have to say goodbye to 380 dedicated Swiggsters. After carefully weighing all of the options, I apologize to each and every one of you for having to make this choice, which was very difficult.
The economic and financial circumstances and the potential for a future recession in the US and other economies are to blame for these huge layoffs. Whether these firings will impact workers in Asia is not yet known. According to Sundar Pichai’s memo about layoffs, notifications of layoffs in other countries would take longer because of regional labor rules. As a result, employees in Asia will find out if the cut affects them starting in February.
Statements against Ashneer’s viewpoint
With more than 37,000 likes, his post has gained traction on LinkedIn. Many users have left insightful comments in response to his post. Ashneer’s ideas were rejected by one of the users, who wrote: “I disagree with your notions, Ashneer Grover, for the simple fact that most employees will dedicate the remaining years of their lives serving others and have little potential to take chances.
In addition, they live off of their EMIs, thus reducing pay for everyone at the expense of a small number of workers will merely demotivate the majority of people and prevent them from giving their all, even though they are capable of doing so.
The billionaire mentioned previously this year that he is developing a new B2C (business-to-consumer) enterprise.
When it comes to the business world, Third Unicorn appears to be steadily and quietly creating a product that would indeed cause a stir. Bootstrapped, And we are acting in a unique way. His previous LinkedIn post reflected this difference in tone, writing, and emphasis.
The bootstrapped business is built with a total paid-up capital of Rs 10 lakh and an officially approved share capital of Rs 20 lakh, as per sources. Grover recently made the transition from co-founder to author with his memoir “Doglapan,” in which he boldly came out against the investors of fintech.
edited and proofread by nikita sharma
