Startups have emerged as the top career aspiration for Indian techies, according to a study by Xpheno, a talent solutions firm. However, recent mass layoffs, heavy workloads, and profitability pressures have raised doubts about the stability of these companies and their potential for job creation.
While India’s job market has shifted away from multinational corporations to startups, the last two years have been challenging for the entrepreneurial ecosystem. In the first half of 2024 alone, nearly 10,000 employees were laid off in Indian startups, marking a slight improvement from the previous year’s numbers. Despite these layoffs, India’s economy continues to show promise, with an estimated 9.7% growth rate in Q1 2024-25. However, HR experts believe that the volatility of the startup environment raises questions about the sustainability of such job opportunities.
Manmeet Sandhu, Chief People Officer at PhonePe, states that the worst of the recent struggles in the startup ecosystem may be over. Speaking on YourStory’s podcast The Mass Effect, she reflected on the hiring and work culture changes in Indian startups. Over the last few years, startups have become particularly attractive to fresh graduates and young professionals. Data from foundit (formerly Monster) shows that 53% of all startup job openings from April 2023 to 2024 were targeting freshers. Bengaluru has emerged as the primary hub for these tech jobs.
The trend toward fresh talent isn’t driven solely by the prestigious IITs and IIMs but by individuals demonstrating strong problem-solving abilities, effective teamwork, and communication skills. According to Kamal Karanth, Co-founder at Xpheno, startup jobs have become highly aspirational, with the number of tech employees in startups doubling during the post-pandemic hiring boom. Even amidst the layoffs, the number of people working in startups remains high, and the demand for tech talent persists. Karanth reports that his company tracked nearly 32,000 hires over the past two years in 190 companies.
Startups are consistently ranked at the top of the career pyramid for techies, followed by large corporations such as FAANG (Facebook, Amazon, Apple, Netflix, Google), Fortune 500 companies, and IT services firms. The bottom of the pyramid is occupied by non-tech industries, including banks and PSUs. According to data from the Department for Promotion of Industry and Internal Trade (DPIIT), India boasts over 1.4 lakh recognized startups, with 117 unicorns as of December 2024.
2024 proved to be a pivotal year for Indian startups, with 12 companies launching IPOs, raising more than $4 billion in funding. Despite the rise in layoffs and challenges, many employees from larger companies have transitioned to startups, indicating the continuing allure of entrepreneurial ventures. Moreover, there is a shift in the way startups view hiring. Earlier, candidates were expected to have specific functional expertise, but now startups are open to candidates with diverse backgrounds who can thrive in a dynamic, fast-paced environment.
As early-stage funding for startups has declined, with $3 billion raised in 2024 compared to $4 billion the previous year, the hiring approach has shifted. Managers are now looking for candidates who possess broad skills and the ability to handle ambiguity. This has led to a greater emphasis on versatility, problem-solving capabilities, and strong interpersonal skills. Recruiters from companies like Meesho and PhonePe are prioritizing candidates with mission orientation and original thinking over technical expertise alone.
Additionally, as more Gen Z employees enter the workforce, startups are adapting their hiring strategies to meet their expectations. Gen Z workers prioritize flexibility and are more focused on solving problems than adhering to a traditional 9-5 schedule. HR experts point out that Gen Z is highly engaged with projects and brings fresh perspectives, making them a valuable asset to startups.
The Startup India initiative, launched in 2016, has resulted in the creation of nearly 15.5 lakh direct jobs by 2024, contributing to 10-15% of India’s GDP growth. According to a report by the Confederation of Indian Industry (CII), India’s startup ecosystem has the potential to add $1 trillion to the economy by 2030, creating 50 million new jobs. This includes 4-5 million direct jobs, 9-10 million gig jobs, and 35-40 million indirect jobs.
In conclusion, while the startup landscape in India is facing challenges, it continues to be an aspirational space for tech professionals. The combination of flexibility, innovation, and the chance to contribute to high-impact products remains a key draw for tech talent, despite the volatility that comes with the startup ecosystem.