Startup layoffs down 62% in 2024 so far; likely to step up hiring

The full year 2023 saw a staggering 16,398 layoffs, according to layoffs tracking platform Layoffs.fyi

After a string of layoffs, startups in India this year are expected to step up hiring by more than 10 per cent over last year, according to human resource platforms.

Layoffs too have fallen year-on-year (Y-o-Y). Firms let go of 3,600 employees in the first five months of the year (January-June), a 62 per cent decline over the 9,596 in the same period the previous year.

In the whole of 2023, there were 16,398 dismissals, according to Layoffs.fyi.

With the startup world on the mend, there has been an almost 40 per cent increase in new startups, which has, in turn, led to a 15 per cent increase in the number of new jobs, said Sachin Alug, chief executive officer (CEO) of talent solutions firm NLB Services.

“Hiring in the past quarters grew by an average of 9-10 per cent. Considering that, we expect the coming months to exhibit a better hiring outlook from employers, especially due to the upcoming festival season,” he said.

Startup funding in the first half (H1) of 2024 showed an upward trend compared to the second half (H2) of 2023. Although funding declined 13 per cent year-on-year (Y-o-Y) in H1 2024, budding companies raised $4.1 billion, marking a 4 per cent increase from the $3.96 billion in H2 2023, according to the data from Tracxn, a market intelligence platform.

In line with the funding trend, several of the country’s large startups are planning to ramp up hiring going into the latter half of the year.

Quick commerce unicorn Zepto is planning to expand its employee base after having raised $665 million in series F funding last week.

“We are planning to hire 400-500 by March 2025, focusing on engineering, product, category, growth, and marketing roles. We have a team of 1,600 people,” said Aadit Palicha, CEO, Zepto, told Business Standard.

Others like e-commerce major Meesho have reported an increase in hiring.

“In the past six months, we’ve expanded our team, adding over 300 experienced professionals and 150 campus hires from the 2024 batch across various roles, including analytics, technology, business, finance, product and design, and fulfilment and experience. We will continue to hire for key roles, particularly from the 2025 campus batch,” said Ashish Kumar Singh, chief human resources officer, Meesho.

According to industry watchers, while certain sectors like information technology show caution, hiring sentiment among startups is relatively optimistic, especially in technology and emerging sectors.

“Established startup bellwethers, unicorns and soonicorns (soon-to-be-unicorns) continue to be active in hiring. These enterprises are expected to lead the startup cohort in hiring volumes, particularly for strategic and executive roles, given their need to support large-scale operations and market expansion,” said Krishna Gautam, business head (direct hire), Xpheno, a specialist staffing company.

Small and mid-range startups, on the other hand, are more focused on hiring for near-term tactical requirements than long-term strategic talent requirements, added Gautam.

Neeti Sharma, CEO of human resources (HR) firm TeamLease Digital, said: “Unlike large information-technology and tech companies that are hesitant to hire fresh graduates, startups are prioritising the recruitment of new talent -- almost 60 per cent of their hires … In the second half of 2024, we perceive there will be a slight increase in hiring, with about 60 per cent of the startup jobs will be taken by entry-level candidates with 0-3 years of experience.”

Regardless, non-tech sectors are known to bounce back as the festival end of the year approaches. The July-December period last year registered significant growth in talent demand in these sectors.

“Sectors like retail, e-commerce, travel, hospitality, consumer services, BFSI (banking, financial services, and insurance), fintech, electric vehicles, media and advertising, logistics and supply chain are among the non-tech sectors to look out for in the latter half of the year,” said Gautam.