A few days ago, Grofers -- India's leading hyperlocal delivery startup -- announced it was revoking job offers to 67 students who were scheduled to join the firm in July. This came right on the heels of a decision by Flipkart to delay the start dates of 17 hires from Indian Institute of Management, Ahmedabad (IIM-A), the premier MBA program in the country, by six months.
This enraged the academic community so much that it practically forced Flipkart to issue a joining bonus of 1.5 lakh rupees (around $2,500) and place them in internships at other firms so these graduates can cool their heels somewhat productively while waiting to join India's biggest online shopping site. Then, in a copycat move, online sites Hopscotch and CarDekho also decided to delay start dates for some of their new hires.
Soon after this, the vaunted cradle of bright minds, the Indian Institutes of Technology, collectively banned six startups for retracting offers made to their graduates. They also threatened to ban five other companies for slashing starting salaries of their new hires by 25 percent.
It is an epidemic that won't stop anytime soon. Just as the last few years were characterised by a giddy excess that saw billions of VC dollars being pumped into copy-cat internet companies that wanted to be the Indian Amazon or Uber, this year has been marked by an ecommerce meltdown. Firms spent wildly on customer acquisitions -- parlance for basically discounting your recent online purchase in the vain hope that you will return as a loyal, long-term customer -- as well as new hires.
There were reports of companies actually hiring people even though they didn't need them in an absurd underscoring of wastefulness in this new dotcom chapter. It was as if VCs, most of them foreign, didn't have any memory of the first internet meltdown that saw hundreds of well-funded entities vanish into thin air chasing valuations based on dollars per clicks. Indian firms such as Flipkart simply haven't been able to raise any cash at preferred valuations while watching their cash burn away, and the leviathan that is Amazon has doubled down in the country, squeezing its competitors.
I remember what it was like to come out of college, desperate for a good job, hoping to pay back loans and start a working life. Being dangled a lucrative job offer only to see it yanked back can come across as a cruel joke. So, quite naturally, there has been a lot of angst and ire generated by these deferments and offer retractions.
Mint newspaper quotes a 25-year-old computer science post-graduate student from an IIT who did not want to be named: "When Flipkart made me an offer, I was over the moon ... I picked Flipkart over Adobe. I knew Flipkart was making losses and was having troubles, but I didn't know the extent of its troubles," the student said.
Wait a second, what? Say that again? You are a student from one of the premier institutions in the country, a breeding ground for future tech stalwarts, CEOs, and entrepreneurs, and you did not know the kind of mauling ecommerce in general and Flipkart in particular were getting? Or prone to? You did not know about all of the valuation haircuts that Flipkart suffered over the past six months? You did not know about the company's inability to raise money? You did not know about boatloads of senior management -- including the chief product officer who was hired from Google, head of advertising and commerce, chief business officer, and vice president of engineering, amongst others -- leaving the company over the past year? You didn't know all this despite it being covered in pretty much every national paper and business magazine?
As any business student should know, these are very different days from an era when a hire joined a Tata or a Levers and stayed with the organisation for decades, moving from sales to operations to marketing. In this brave new dog-eat-dog world, hires are ready to jump ship for a better package in the blink of an eye if the opportunity were to present itself. Similarly, dotcom firms are the most vulnerable to the fluctuating whims of VCs, markets, and competition, and may need to jettison excess baggage if need be. It isn't pretty and it may not seem fair but this seems to be what life in the fast lane is like. So, if you chose to join an ecommerce firm and failed to read the ample smoke signals wafting through the air for months, tough.
There's more. The fact is, as this article points out, every student from the elite IITs are heavily subsidised by the government -- students spend approximately 90,000 rupees each year ($1,343) for an education that has an annual tab of 3.4 lakh rupees ($5,075). The rest is borne by you and me. While some of these students come from impoverished backgrounds, many don't.
All of this is okay if a good chunk of these people go on to Indian research institutions or the space program or anything that could utilise their skills to develop the country further. But they don't. In fact, what many of these mechanical, chemical, electrical, computer, metallurgical, and aerospace engineers do is go to an IIM or a Wharton and then join McKinsey or Goldman Sachs and make millions of dollars. Others launch ground-breaking startups abroad (Vinod Khosla of Sun Microsystems), at home (Sachin and Binny Bansal co-founders of Flipkart), or head global firms (Sundar Pichai of Google; erstwhile head of Softbank, Nikesh Arora). Many join startups on lucrative pay packages.
Now, that is of course more than okay. It's in fact great and I'm not saying that in a disingenuous way because I am secretly an envious, impoverished writer who chafes at their success (which may well be the case). Clearly, a preponderance of these folks are committed in some fashion to seeing India flourish even if it is in indirect ways.
All I'm saying is maybe it's best to keep things in perspective before getting into a tizzy about retracted job offers.