Unicorn startups' headcount declines 6.7k in a year: PrivateCircle Research

Mumbai unicorns saw a net decrease of 7,024 employees. Pune and Hyderabad too recorded a decrease in their overall workforce numbers

 

The number of workers in unicorn startups of India reduced by about 6,700 between August 2023 and the same month this year, with layoffs being part of the reason for the decline, according to an analysis by PrivateCircle Research.

 

Overall, 116 Indian unicorns employed 410,829 people in August this year as against 417,561 in the same month of 2023.

 

Across the major startup hubs, Delhi-NCR (NCR is National Capital Region) saw the maximum addition in number in the period concerned.

 

Some of the mass recruiters in Delhi-NCR included PolicyBazaar, Blinkit, and Zomato. 

 

PrivateCircle has clubbed startups from the NCR under “Delhi” and Thane unicorns have come within the “Mumbai” region.

 

 

The second-highest employee addition was recorded by Chennai-based unicorns, followed by Bengaluru.

 

In contrast, Mumbai unicorns saw a net decrease of 7,024 employees.

 

Pune and Hyderabad have also recorded a decline.

 

On average, the 116 unicorns had an attrition rate of 4.5 per cent between August 2023 and August this year.

 

Indian unicorns like Zerodha, Zoho, and MapMyIndia maintained attrition rates of 1 per cent or lower. Other unicorns that had below 2 per cent attrition rates include Ather Energy, Druva, Dream Sports, Icertis, and Uniphore.

 

Hiring at unicorn startups picked up from March, which was the peak hiring month, with 42,000 employees taken in. Some unicorns that saw a significant workforce increment in that month were Paytm, BigBasket, and PB Fintech.

 

September last year was the highest loser in the period, with 39,000 leaving that month. 

 

PrivateCircle’s previous report was concerned till July 2023. The analysis includes only employees for whom provident-fund contributions were made.

 

The 116 unicorns included additions like Moneyview, Ather, and Rapido. Polygon, Hasura, and 5irechain were excluded because they did not have employee count entries in the EPFO (Employment Provident Fund Organisation) data. This could be because these companies are headquartered outside India.

 

The study also excluded Rivigo and Shopclues because they had been acquired at valuations lower than $1 billion (unicorn valuation).

 

However, Murali Logananthan, director, research, PrivateCircle, said unicorns continued to be large employers in India.

 

“We find compounded revenue growth among most unicorns has been in high double digits over a two-year period and yet these have maintained stable employee numbers. This signals efficient usage of human capital even during periods of high growth,” said Logananthan.

 

According to the government data, more than 5,000 startups registered under the Startup India initiative have shut down. These accounted for 3.3 per cent of the 152,000 startups recognised by the Department for Promotion of Industry and Internal Trade (DPIIT).

 

This was stated by Jitin Prasada, minister of state for commerce, in the Lok Sabha on December 10.

 

Maharashtra leads in the number of closures, with 929 shutdowns. Other states with significant closures include Karnataka (644), Delhi (593), Uttar Pradesh (487), and Telangana (301).

 

Factors in this include competition, insufficient funding, and unclear market strategy, according to industry experts.