After two years of subdued activity triggered by funding constraints and macroeconomic turbulence, India’s startup landscape appears to be regaining momentum. Fresh data from workforce specialist Xpheno indicates a net addition of 60,000 employees in FY25, pushing the total startup workforce to 5.9 lakh by year-end.
In all, 1.6 lakh professionals were hired during the fiscal year, a figure comprising both net growth and the backfilling of one lakh positions lost to attrition. While short of the 1.8 lakh recorded at the hiring peak in FY23, the number marks a clear reversal from the slowdown of FY24, which saw just 1.2 lakh additions.
Encouraged by these green shoots, Xpheno forecasts a stronger revival in the coming year. Its projections for FY26 include 80,000 net new roles, which would elevate the total tech workforce to 6.7 lakh. If realised, this would signal a return to pre-downturn hiring highs not seen since FY22.
This optimism is echoed in a concurrent report by TeamLease, which identifies a “cautious recovery after the funding reset” in its Employment Outlook Report. For the first half of FY26, the startup and tech sector is projected to register a net employment change (NEC) of +6.9 per cent. Though lower than the +8.9 per cent recorded in the latter half of FY24-25, the trend underscores a stabilising environment.
Crucially, 69 per cent of surveyed employers in the ecosystem expect to grow their teams, driven by demand for AI-led product innovation, growth-focused marketing roles, and talent in cloud-native infrastructure. However, the outlook remains mixed, with 12 per cent of companies bracing for workforce cuts in pursuit of tighter cost control, and 19 per cent maintaining current headcounts.
In terms of roles, technical expertise remains in sharp demand. “DevOps, product manager, and full-stack developer” profiles are among the most sought-after, particularly across B2C, D2C, and platform-first ventures, the report noted.
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A Post-Pandemic Labour Trajectory
A five-year view reveals a sector that has weathered extremes. From FY21 to FY25, Indian tech startups expanded their white-collar workforce from 2.5 lakh to 3.6 lakh, accounting for a cumulative gross hiring of 7.1 lakh.
FY21 was marked by extreme caution, with the pandemic limiting net additions to 50,000. The subsequent year saw an extraordinary surge, with 2.1 lakh net hires driven by aggressive scaling and widespread investor backing. At its peak, this translated to 800 to 900 hires daily. But this boom began to taper midway through FY23, as the global capital slowdown reached Indian shores.
FY24 proved particularly bruising. Funding dried up, valuations declined, and large-scale layoffs resurfaced. Net additions collapsed to pandemic-era lows, triggering deep structural introspection across the ecosystem.
FY25, however, offers a tentative inflexion point. Though still short of past exuberance, the return to hiring signals a maturing sector — one that is rebuilding with discipline, sharper product focus, and a new set of growth priorities anchored in sustainable scale rather than unchecked acceleration.
Insights from agencies
