HackerEarth, backed by Prime Venture, introduces global pay cuts and trims workforce
- ByStartupStory | February 15, 2023
HackerEarth, a tech-focused skilling and hiring startup, has reportedly laid off around 8% of its employees across different verticals due to challenging macroeconomic conditions such as economic downturn, funding crisis, and potential recession in the US market. While the company’s LinkedIn page shows over 630 employees, the actual number of impacted employees may be around 45-50, as per Mint report. However, HackerEarth confirmed laying off only 17 employees and did not disclose the number of affected employees in India.
HackerEarth’s CEO Sachin Gupta stated that “the company had experienced a period of strong growth in 2020 and 2021, and had accordingly expanded its team in anticipation of continued growth”.
However, a hiring slowdown in the latter half of 2022 resulted in lower business growth than expected, leading the company to make difficult decisions to ensure long-term sustainability and profitability. In addition to laying off a small number of employees, HackerEarth has implemented pay adjustments across the organisation to overcome challenges and maintain the business’s stability in the future.
HackerEarth has offered a severance package, which includes eight weeks of pay, to employees affected by the recent layoffs. Furthermore, employees with over two years of tenure with the company have been provided with an extra week of pay for each year of service.
In addition, the company has implemented graded organization-wide pay adjustments to minimize the impact on lower-salary staff, with the leadership team taking the largest cut. While acknowledging the pain caused by these measures, HackerEarth CEO Sachin Gupta assumed full responsibility for the decisions made by the company.
HackerEarth, a Bengaluru and US-based startup founded in 2012 by Sachin Gupta and Vivek Prakash, had previously secured $6.5 million in a Series B funding round.
The startup operates a platform that assists technology companies in hiring developers, as well as offering upskilling services for corporate employees through its platform, Sprint.
Previously, HackerEarth reported experiencing 100% revenue growth in the US market and conducting over 2.1 million assessments in 2020. The startup’s LinkedIn profile indicates a global workforce of 631 employees, of which 461 are based in India.
HackerEarth operates a platform that facilitates the recruitment of developers for technology firms and provides corporate employee upskilling services through its Sprint platform.
HackerEarth’s list of investors includes Beenos Partners, BizReach, BEENEXT, Prime Venture Partners, Smile Group, and TA Ventures, among others. The recent layoff by the company has taken place amidst a challenging period for the startup ecosystem, which is struggling for survival due to factors such as funding shortages, the ongoing Russia-UK conflict, increasing market inflation, and low investor confidence.
Numerous startups have implemented cost-cutting strategies, such as pay reductions, layoffs, business pivots, and business restructuring, due to the challenging economic climate. Indian startups have laid off more than 21,500 employees since January 2022. Recent additions to the list of laid-off companies include Ola, Fareye, Exotel, and Innovaccer.
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