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Indian AI tech support startup Saarthi.ai has allegedly laid off several employees in batches. The company has claimed it needed a leaner operation primarily because of “investor pressure”.
As Indian startups, primarily in the tech space, increasingly face an uncertain future due to investor expectations about profitability, multiple fledgling companies are resorting to questionable tactics. Let’s look at the latest developments, which could be an indicator of the future of AI-based tech startups in India.
Investor Pressure To Turn Profitable Forcing Lay-Offs In India?
Bengaluru-based AI tech support startup, Saarthi.ai, is under the microscope on the internet for its alleged controversial attitude towards employee welfare. Incidentally, the startup has acknowledged it is under “investor pressure” to achieve profitability.
Although the exact details are difficult to verify, some employees resorted to posting about their difficulties pertaining to salaries and abrupt terminations on social media. The exact number of affected employees remains undisclosed and unverified, but Saarthi.ai’s Founder and CEO, Vishwa Nath Jha, acknowledged restructuring the company’s staff.
“Our team has been restructured in light of technological advancement and many team members were let go in batches as a result. We had to automate low-level professional cognitive skills of our staff due to investor pressure to become profitable.”
The news about employees in distress was circulated on the Internet after an employee posted on Grapevine, a startup social media platform, that Saarthi.ai has not paid salaries to its employees since March 2023.
The post alleged that about 140+ employees have been given false hopes of receiving their salaries soon. The employee claimed the senior management continues to receive payment but junior and middle-management employees are being ignored.
Are Indian Companies Facing Uncertain Times?
Saarthi’s CEO has indicated that the full and final settlement for early batches of the employees who were let go has been cleared. “The rest will be cleared within 90 days as per the company policy. We’re working with investors to resolve this…event,” he added.
Simply put, the AI tech startup could be hounded by investors, who have become quite wary and skeptical about Indian startups after the pandemic. Many investor firms and seed funding organizations are demanding startups pull up their socks and start showing some profits or other metrics denoting positive growth.
It goes without saying that many Indian startups are running on investor money as they are yet to generate any self-sustainable revenue. Hence, to cut costs and ensure better liquidity, several startups are laying off employees, delaying salaries and benefits, and canceling multiple perks which were showered previously.
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published: Friday, July 21, 2023, 11:14 [IST]
