India’s startup landscape, which has experienced turbulent times over the past two years, is now showing cautious signs of recovery. According to data from layoffs.fyi—a global platform that tracks job cuts in the tech world—only seven Indian startups have laid off a total of 1,602 employees in 2025 so far. This marks a sharp decline from the same period last year when 20 companies let go of 3,355 workers.
The significant drop in both the number of companies implementing layoffs and the total number of affected staff signals a potential turning point for India’s startup ecosystem. It suggests that startups are beginning to operate with stronger financial discipline and are benefiting from a stabilising funding environment.
While the sector is still far from the hyper-growth and hiring frenzy of 2021, the era of sweeping job cuts appears to be receding. Founders are shifting focus from survival strategies to sustainable growth, and investor sentiment is beginning to stabilise.
In 2024, India’s startup sector was still under pressure, with over 9,000 employees laid off across 44 companies. Widespread cost-cutting, restructuring, and a tepid funding climate forced major players—such as Byju’s, Paytm, Flipkart, Swiggy, and Ola Electric—to conduct large-scale layoffs. These job cuts were not only confined to non-core roles but extended deep into engineering and operations teams.
This year, however, the narrative appears to be shifting.
Among the most significant layoffs in 2025 was Ola Electric Mobility, which reportedly let go of around 1,000 employees and contract workers over a two-month period. The company has not officially confirmed the figure but is believed to be streamlining its operations ahead of its much-anticipated IPO.
Meanwhile, conversational messaging platform Gupshup laid off approximately 200 staff, and used car marketplace Cars24 also reduced its workforce by about 200 employees. Audio entertainment startup Pocket FM cut 75 jobs in January, attributing the decision to a strategic move aimed at reducing costs and accelerating profitability. Social media platform ShareChat laid off 27 employees—less than 5% of its workforce—as part of its annual performance review cycle.
Supporting this cautious optimism is an uptick in startup funding in 2025. According to data from Tracxn, Indian tech startups raised $2.5 billion in the first quarter of this year. This represents a 13% increase from the previous quarter and an 8.7% rise year-on-year.
India now ranks as the third-largest destination for startup funding globally, behind only the United States and the United Kingdom. The return of investor interest, even if modest, is helping early and growth-stage startups feel more confident in maintaining workforce levels.
This funding momentum, combined with lessons learned during the downturn, is prompting founders to take a more measured approach to growth—one focused on unit economics, lean teams, and long-term viability rather than rapid scale.
India’s moderation in layoffs is not occurring in isolation. Globally, the tech industry is also witnessing a slowdown in job cuts. So far in 2025, around 112 companies across the world have laid off just over 51,000 employees, according to layoffs.fyi. This is a notable drop from the nearly 79,700 job losses reported during the same timeframe last year.
The reduced pace of layoffs indicates that companies—especially in the technology and startup sectors—may be moving beyond crisis mode. After two years of aggressive restructuring in response to rising interest rates, funding freezes, and declining consumer demand, businesses are now pivoting towards stability.
While the numbers for 2025 thus far are encouraging, the recovery is still in its early stages, and macroeconomic uncertainty remains. Global conflicts, inflationary pressures, and fluctuating investor sentiment continue to pose risks for emerging businesses.
However, the fact that fewer companies are laying off fewer people is a promising sign. If the funding environment continues to improve and startups stick to more disciplined financial strategies, the Indian startup ecosystem could be entering a more mature and resilient phase.
