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Fund Starvation Causing Layoffs in India: How Staff Augmentation can Correct the Situation?

The year 2023 has begun, and it is time for a weighty introspection as major US companies and MNCs have laid off several workers in the past few months.

It has been seen that the companies are laying off the workforce between 5 and 16% in 2023.

There has been a decline in the demand of consumers after the pandemic, which has triggered several uncertain conditions that began in the United States, where numerous workers were laid off in tech firms.

It was reported that on December 30, 2022, startups laid off more than 18,000 people, which increased as profits declined in 2023. Four Indian startups at the beginning of the year had reduced profits compared to the previous decline by 75%, and therefore due to the lack of funds, they could not pay for the essential skills required by the company.

However, even in this very dim situation, there is always a solution: implementing staff augmentation. With challenging times ahead, businesses are keen on utilizing staff augmentation services to meet their workforce issues.

How to Deal with a LayOff Situation at Workplace?

No one will tell you that you should lay off your employees. It will not only harm the brand image of the company but also take away the livelihood of your employees. However, if you are financially burdened, you can utilize outside talent to improve the outcomes in the company. Indian start-ups have been impacted in the last six months and have struggled to increase funds and reduce the skill gap. For a positive outcome, soft and hard skills are required in equal amounts to increase the success of the project. And the new tech companies can avail staff augmentation services. According to industry experts, recruitment and retaining talent can be challenging, especially for tech companies where space is in demand, and experienced individuals with the talent for the project are hard to find. Most companies today need help finding the right skills due to the lack of resources. It is where staff augmentation comes in after you have reduced your workforce exponentially.

Understanding the Indian Scenario and the Use of Staff Augmentation

staff augmentation 

According to the Economic Times, India may become the next new powerhouse of the world, even surpassing China. This year nearly 20% of India’s budget is focused on capital investments, the highest in decades.

The country is trying to become a leader in the economic sphere by using innovative solutions to minimize skill gaps, reduce corruption and end red tape. However, inequality and the lack of dignity of labor define democracy which can easily be adjusted with innovative techniques such as staff augmentation. Tech companies struggling to survive in this uncertainty can reap staff augmentation benefits but also reduce unemployment and unequal distribution of wealth. According to tech giants, India is on the threshold of a vast transformation that is creating a capacity to support tens and thousands of start-ups and workers by giving them a chance to increase their skills and reduce the gaps in the industry. India right now is in a unique position where on the one hand, there is a recession and layoffs, and on the other, there is a perfect solution that can reduce unemployment and ensure effective staff management. Staff augmentation benefits not only the company but the nation.


Review your company financials and understand your workforce needs before you take a drastic step. Utilize experts in the staffing industry to know how you could use your investments in the correct direction. Remember, augmenting your staff will save your time and money and reduce the nation’s inequality in terms of unemployment and wealth. Getting the right talent at the right time can decrease risk and increase positive outcomes.


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