 "Indian startups to boost hiring by 20-30% in 2025 as funding improves")
Indian startups are preparing to ramp up their talent acquisition efforts as the funding environment improves after a prolonged period of layoffs. Staffing firms project a 20-30 per cent increase in hiring among startups heading into 2025, according to a report by Moneycontrol.
Layoffs in the startup sector have significantly declined, falling by 46 per cent year-on-year (YoY) to 8,895 in 2024, compared to an estimated 16,398 in 2023, the report said, citing data from Layoffs.fyi.
Industry experts attribute this shift in hiring sentiment to an improving funding landscape. Funding for startups has increased by 14 per cent YoY, reaching $10.9 billion in 2024 so far, prompting companies to focus on growth again.
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Key sectors leading hiring trends
Sectors such as retail, e-commerce, fintech, FMCG, automotive, travel, and hospitality are expected to witness the most significant hiring growth. In contrast, sectors like BFSI, telecom, healthcare, pharma, and energy may experience subdued hiring activity, particularly in the first quarter of 2025, the report said.
The slowdown in startup hiring was primarily caused by the “funding winter,” which led to a freeze in investments for 12-18 months. Investment volumes, which peaked at $36 billion in 2021, fell sharply to $24.7 billion in 2022 and declined further to $9.6 billion in 2023, according to data from market research firm Venture Intelligence.
Startups are now utilising funds to restructure teams and optimise operations for long-term growth. For instance, a Series A funding round of $10 million typically supports hiring 25 IT professionals, while a $20 million round can enable the recruitment of 40 senior-level executives, said Neeti Sharma, CEO of TeamLease Digital, as quoted in the report.
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Despite the recovery, some major companies, including Paytm, Flipkart, and Byju’s, laid off thousands of employees in 2024. Active talent demand from startups currently stands at approximately 20,000 openings, comparable to June 2024 levels. However, this remains significantly below the 45,000-55,000 openings seen during the peak of startup hiring activity, the report noted.
Rising demand and attrition rates
Hiring platforms anticipate continued growth in active demand. By the second quarter of 2025, hiring demand may exceed levels last seen in early 2022. Salary expectations are projected to increase by 5-7 per cent on average, and attrition rates are expected to stabilise. To counter turnover, startups are investing in retention strategies and employee engagement programmes to enhance loyalty, the report added.
(With agency inputs)