Senior-level exits and layoffs seen at technology startups in recent months have turned out to be a boon for the early-stage companies.
The exits have given the younger firms an easy access to top-level talent. Recently, a few Internet startups cut hundreds of jobs due to escalating costs and shutdown of operations in some locations due to poor demand for their services.
"Once we got to know that a Mumbai-based company would be resizing their staff, we parked four of our tech architects and the HR (human resource) at Mumbai for two days for back-to-back interviews," The Economic Times quoted Manish Chopra, co-founder of deal discovery firm Little, as saying.
"That was very fruitful as we will be onboarding a senior product lead and an analytics person soon," said Manish Chopra of Little.
Chopra said that the talent pool created by layoffs at other companies has also given an opportunity to hire former chief executives and startup founders easily.
His company, which is backed by mobile payment services Paytm, has recently recruited four key executives. Manish Chandra Jha, cofounder of Autowale, was among those hired by the company and he is now vice-president of seller marketing at Chopra's company.
"It is a practice among investors to inform other portfolio companies when one of the companies is downsizing staff," said Alok Goel, managing director at venture capital firm SAIF Partners.
Last year, real estate services portal Housing.com laid off over 800 employees as it came under pressure from investors to trim costs. Similarly, online food ordering firms Foodpanda, Zomato and TinyOwl had given pink slips to hundreds of employees as they had to close their operations in several cities.
The talent pool resulting from the layoffs has made other companies to scout for suitable candidates with ease.
"On an average, each founder I have spoken to has recommended three to four employees. It is the humane thing to do when the company is unable to raise funds or is looking to resize its employee base," said Pranav Goel, co-founder at mini-truck aggregator, The Porter.
"A couple of years ago employees were attracted by startups paying a much higher premium over other industries. Now, employees understand the value of stock options and are ready to move more or less at similar fixed cost to a smaller startup but at a much higher equity, anything ranging from 1-2 times of the fixed salary," said Aneesh Passi, co-founder of Basil Advisors, which helps startups hire senior executives.
