Indian Startup Layoffs Plunge 67% in H1 2025 as Hiring Rebounds

After a rough patch over the last two years, layoffs in Indian startup have seen a significant drop in the first half of 2025. According to Moneycontrol, in the first half (H1) of calendar year 2025, layoffs dropped sharply by 67% year-on-year (YoY). Job cuts fell to 2,387 across 12 companies, down from over 7,100 across 25 startups during the same period in 2024, according to data from Layoffs.fyi.

Karthikeyan Kesavan (KK), Director and Head of Business, Permanent Recruitment at Adecco India, “We see a 35 percent YoY surge in startup hiring — the highest in two years. Growth-stage startups are leading the surge, followed by late-stage firms expanding strategically. Early-stage startups remain cautious.”

From Layoffs to Hiring

Between January and June 2025, startups in India let go of around 4,200 employees. This is a sharp drop compared to the same period last year when over 12,700 people were affected. The data suggests that downsizing in India startup may have reached its peak in 2023 and is now steadily easing.

While layoffs haven’t disappeared completely, the scale and frequency have reduced. Most of the recent cuts were seen in smaller startups or companies undergoing mergers or internal restructuring.

At the same time, many large startups have restarted recruitment for critical roles. This signals a turning point, especially for sectors like fintech, logistics, and deep tech that are seeing steady growth.

Green Shoots in the Job Market

Signs of recruitment growth in Indian startup are becoming clearer. HR consultants say that while hiring is still measured, companies are beginning to fill leadership and tech-focused roles again.

Some startups are also setting aside budgets for team expansion in the second half of the year. A few are even reviving deferred offers from last year, pointing to a gradual restoration of confidence.

Investors, too, are seeing this as a healthy signal. Many believe that startups are no longer cutting jobs simply to stay afloat but are now doing it as part of larger operational shifts.

Improving Investor Mood

The slowdown in Indian startup layoffs is being seen as a broader signal of stability returning to the venture ecosystem outlook in India. Funding rounds have picked up slightly compared to the previous two quarters, and valuations are becoming more realistic.

Venture capital firms are also urging startups to adopt a lean but growth-focused approach. Founders are now trying to strike a balance between cost control and talent investment, which is essential for sustainable growth.

While IPO activity is still limited, M&A deals and strategic partnerships have helped revive the energy in the ecosystem.

Outlook for the Rest of 2025

Experts tracking employment trends in 2025 believe the worst is likely behind the startup workforce. Unless there are major global shocks, job cuts are expected to stay low for the rest of the year.

Hiring may remain cautious but steady, especially in high-demand roles such as product development, data science, and AI.

The sharp drop in layoffs in Indian startups in Q1, 2025 is a sign of recovery and resilience. With improved sentiment and clearer focus, India’s startup ecosystem may now be gearing up for a more stable and growth-oriented phase.