Indian unicorns cut back on employee appraisals as cost-cutting takes priority

A majority of over 100 unicorns in India have slashed appraisal budgets for 2023 as the startups increasingly look to cut costs while grappling with a prolonged funding winter amid deteriorating macroeconomic headwinds.

The trend comes as a contrast to 2021, when startups hired aggressively amid immense investor interest and multiple fundraising rounds. With the funding pipeline running down, the tide has turned and tech startups are now racing to become profitable by cutting down the excess.

Anshuman Das, CEO of Careernet, told Moneycontrol that while layoffs have helped reduce expenses to an extent, the focus on frugality will affect hikes and bonuses this year.

“Last year startups were giving dramatically high hikes in the range of 20-30 percent. That will come down to almost singular digits. Companies are trying to rationalise their budgets… with layoffs. These very low to moderate hikes and bonuses have also been very stressed out,” Das added.

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