After two rough years of mass layoffs and hiring freeze, Indian startups are beginning to shake off the gloom.
In the first half (H1) of calendar year 2025, layoffs fell by a massive 67 percent year on year (YoY)— dropping to 2,387 job cuts across 12 companies, from over 7,100 across 25 startups in the same period last year, according to data from Layoffs.fyi.
At the same time, hiring activity has rebounded meaningfully across sectors by 35–40 percent in H1 2025, according to industry experts and recruitment platforms Moneycontrol spoke to. This is higher than the earlier estimates for 2025, which expected hiring to increase by 20-30 percent.
The recovery is most visible among growth-stage startups in sectors such as SaaS, green energy, healthtech, logistics, consumer and IT, a shift that signals not just survival but a return to building.
“We see a 35 percent YoY surge in startup hiring — the highest in two years,” said Karthikeyan Kesavan (KK), Director and Head of Business – Permanent Recruitment -- at Adecco India.
Much of this momentum is coming from startups that are past the early product-market-fit stage and are now cautiously scaling. “Growth-stage startups are leading the surge, followed by late-stage firms expanding strategically. Early-stage startups remain cautious," Kesavan added.
TeamLease Digital CEO Neeti Sharma agreed that the tide is turning, though not yet surging. “Hiring has gone up by about 35–40 percent in H1 2025, especially for tech, growth and product roles. It's not a full recovery, but the sentiment is clearly more positive than last year,” she said.
Behind the recovery is a mix of factors: a modest revival in funding, stronger business fundamentals, and a shift away from indiscriminate blitzscaling. Q1 2025 alone saw Indian startups raise around $2.5 billion, according to NLB Services CEO Sachin Alug, helping restore some confidence in long-term planning.
“We’re seeing more investor confidence coming back, and that steadies the ship,” Alug said. “But more than that, hiring today is more intentional. Companies aren’t rushing to grow, they’re building leadership, stabilising teams, and focusing on roles that move the business forward. It’s less about scale, more about direction," he said.
The signal is clear. Demand is strong for mid-level and leadership roles, particularly in Tier-II cities and emerging domains like EV, GenAI, and climate tech. According to Adecco, companies are targeting skilled professionals in tech and operations rather than entry-level hiring sprees.
From backfills to fresh bets
Startups are not only refilling roles that were cut during the 2023–24 downturn, but also hiring for new roles as companies expand into new geographies and product categories.
“About 70 percent of growth-stage startups are rebuilding their tech and operations teams,” Kesavan said. “But there’s also new hiring to support fresh market and product bets. It’s a shift from recovery mode to forward-looking growth.”
Alug echoed that dual-track trend: “Yes, companies are rehiring for functions like product, engineering, and revenue. But there’s also fresh hiring happening, driven by new priorities like AI, customer success, and go-to-market (GTM) efficiency.”
The resurgence is not limited to existing players either. Startup formation has picked up meaningfully, with TeamLease reporting a 20 percent increase in new ventures in H1 2025 — particularly in areas like GenAI, vertical SaaS, EV infra, and AgriTech. This wave of new startups is fuelling fresh job creation, especially outside traditional tech hubs.
“Many of these new companies are emerging from Tier-II cities like Jaipur, Indore, Coimbatore, and Vizag. It’s not just a metro story anymore," Sharma said.
Adecco’s Kesavan added that while only about 13 percent of current job growth is directly linked to these new ventures, the trend is significant, especially as startups look to optimise cost structures by building teams outside metros.
A shift towards stability
Alongside rising hiring numbers, compensation and job security have also improved. While average salary hikes are in the 6–10 percent range, top tech roles are seeing hikes of up to 40 percent, according to Adecco. Startups are also increasingly offering ESOPs and long-term incentives to retain talent.
“There’s more stability this year, and that’s showing in how compensation is structured,” said Alug. “Instead of just overpromising on pay, startups are becoming smarter now and offering better perks.”
Sharma noted that startups are now better placed to offer market-aligned salaries. “With late-stage startups focusing on growth and early-stage ones getting funded again, startups are now in a better position to pay the market rates to attract and retain talent,” she said.
The hiring rebound may still be cautious, but it marks a turning point. After a bruising cycle of layoffs, the Indian startup ecosystem is regaining its footing — not through aggressive expansion, but through selective, strategic growth. The mood may not be exuberant, but it's confident. And this time, it's built on firmer ground.
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