Strategy consultancy Bain & Company fires over 150 consultants in India offices
Bain & Company has in recent months laid off between 150 up to 250 employees in its India offices, mostly as a result of the downfall of American investment firm Tiger Global. Bain & Company was the preferred strategy and deals consultant of the disgraced investment firm, which was betting big on Indian startups.
The startup scene in India has been on a wild ride in recent years. With hundreds of thousands of startups across the subcontinent and over 110 unicorns (valuations of $1 billion or more), there has been plenty of reason to buy into some of the hype.
But of course, not everything that glitters is gold – and not all well-funded startups are actually sound businesses. Tiger Global has found this out the hard way, with the hedge fund losing nearly 60% of its assets in 2022, making it one of the worst-performing hedge funds of the year.
After 10 years of operations, Tiger Global – which some hedge-fund managers called “the poster child of the tech meltdown” – lost billions of dollars in gambles it made on startups around the world, with many notably in India.
After promising investors a $6 billion target in its latest venture capital fund, the firm was only able to close on about $2.2 billion. That came amid broader talk of a tech bubble, fueled by huge bets and over-valued companies (with Tiger Global one of the main culprits) and global venture capital investments hitting a record low.
So, where does Bain & Company come in? Tiger Global’s downturn dragged Bain & Company down with it because the consulting firm was the investor’s preferred consultant. Business Insider reported that the investment firm paid the consultancy over $100 million a year to help beat the competition, with “an army of consultants from Bain” mostly in charge of strategy work and commercial due diligence support.
A portion of the remarkable array of investments that Tiger Global had been making since back in 2021 were in Indian startups. One source claimed that Tiger Global made $6.5 billion worth of investments in Indian companies like Razorpay, Ola, and PhonePe, among others.
That has now apparently come back to haunt & Company’s India division, which reportedly cut 15 to 20% of the jobs at its India offices. This comes after record levels of hiring in 2022 brought many new consultants on board, following a period of higher demand.
Indeed, the consulting industry as a whole has seen difficult times in the past two years, making these kind of mass layoffs not entirely uncommon. Last year, McKinsey & Company laid off hundreds of employees, including in its India team. And this year, also the likes of the Big Four and the large Indian-origin IT groups have been downsizing their teams to match current demand.
