Amid layoff bedlam, Dunzo is the latest to dismiss 3 per cent of its employees

The Google-backed delivery service, Dunzo, joined other tech companies in a layoff frenzy that saw the sacking of an estimated 90 staff members from its 3,000-odd personnel. CEO Kabeer Biswas has come forward to explain these layoffs as being part of a restructuring process which aims to bring in more efficiency into the teams. While this news was anticipated, it is important to get to the root cause of this incessant wave of layoffs in the tech sector. 

During the pandemic, the world had come to a lengthy standstill, with the paradigm shifting online. This shift saw a upsurge in demand for online products and services like OTTs (Netflix, Prime Video), home deliveries (Dunzo, Zomato), video conference software (Zoom, MS Teams) in the backdrop of global turmoil. Record revenues were collected by such companies, making many top executives falsely believe that this was the new normal. This shibboleth prompted several tech companies to facilitate their hiring process, and build larger teams than required, partly due to hedge against mass staff exodus.

Three years post the pandemic, tech companies have realized that they hired too many people, as life has resumed to normalcy. Moreover, if this hiring frenzy was insufficient, the current economic predicament and a likely recession has led to corporations looking to minimize their costs. While small to medium scale businesses are laying off to keep their business afloat, large MNCs are simply looking to maximize profits and keep their investors content.