The worsening macroeconomic conditions globally and efforts to bring down costs have led to a slump in hiring across mid-to-senior roles in Indian startups, several industry experts and hiring firms told ET.

Hiring for senior leadership roles has dipped 60%-80% year on year across new-age tech firms and their hiring outlook has turned ‘dreary’ amid a funding winter, experts said.

“It’s a clear crash and we have seen new hiring drop by almost 80% between January last year and this year,” said Supreet Singh, cofounder and managing partner of Native, an executive search firm.

“Startups are hiring only for critical business roles and there is still some hiring in early stage companies since they need to grow their scale,” he said.

Anshuman Das, cofounder and chief executive officer of staffing firm Longhouse Consulting, said there was a 50%-60% dip in hiring of senior leadership roles across startups in India between 2021 and 2022.

“In 2023 as well, the same quantum of dip is anticipated,” he said. “This is especially more clear, having seen the January to March quarter trends. The next six months look more dreary as there is going to be a lot of retrenchment rather and reduction of top management roles at startups.”

Several Indians startups have resorted to layoffs to keep their burns in check.Longhouse Consulting saw a three-fold rise in inbound senior candidates (who annually draw Rs 70 lakh or more) looking to get hired during the March quarter compared to the previous quarter, Das said.

Singh of Native said the slowdown in the job market for mid-to-senior roles started in the April-June quarter last year. “Since the June quarter (last year) we can see a 50% quarter on quarter drop in terms of hiring for senior roles,” he said.

Fintech, ecommerce top hiring

According to data compiled by Native, fintech and ecommerce were top employers last year and contributed to 54% of the total mid-senior and senior hirings in the industry.

The edtech space, which crowned several unicorns such as Unacademy, UpGrad, Vedantu and Eruditus in the post-Covid digital rush, contributed to 15% of senior hires in the industry last year, the report stated.

This is in spite several of these startups including Byju’s, Unacademy and Vedantu have taken multiple layoff exercises in a bid to increase their cash runway.

Also read | Employees at troubled startups face the heat of funding winter, pressure to cut costs

“Every third mid-to-senior resource hiring in the startup sector was in the fintech segment, followed by ecommerce and edtech,” Singh said. “Almost 60% of the moves were for non-tech roles.”

A significant part of the hires was across general management and other business functions including marketing and sales – a stark contrast from the bullish hiring across technology roles in 2021.

The report surveyed 2,000 people movements across 150 unicorns and soonicorns in more than six sectors between January 2022 and 2023.

Large unicorns, which shored up considerable capital between Covid years of 2020 and 2021 including Byju’s, Paytm, Flipkart, Swiggy and Razorpay were the top brands to continue hiring last year in spite of global macroeconomics weakening.

While India’s over 100 odd unicorns contributed to 68% of the overall hiring in the space, soonicorns or startups nearing a unicorn valuation contributed to the rest, Native data showed.

Unicorns are privately held startups valued at $1 billion or more. Soonicorns are startups widely perceived to have the growth potential to soon become unicorns.

Impacted employee morale

In 2021, amid increasing salaries and incessant job offers and counteroffers, it was increasingly difficult for candidates to be converted to employees. But now, laid-off employees and other jobseekers are mostly looking at safer options outside the tech ecosystem.

“Startups can help you grow, but if there is no guarantee of stability, continuation, all of that…it will still not be a great story to tell people,” said Aditya Mishra, managing director and CEO of CIEL HR Services. “They will start looking at safer options.”

The uncertain macroeconomic conditions have led to tightening of investments, triggering mass layoffs across big tech firms such as Meta (Facebook), Amazon, Microsoft, and Alphabet (Google), among others.

Indian technology firms have not been immune to this with several late-stage companies including Swiggy and Sharechat laying off teams.

Also read | Layoffs in 2023: Accenture, Indeed, Amazon among latest firms to cut jobs amid economic turmoil

“Employers are waiting it out and skimming the top talent on terms that are well within their zone,” said Prasadh MS, head of workforce research at specialist staffing firm Xpheno. “Despite the low gear start, 2023 is shaping up as the year for correcting recruitment mistakes that employers committed in 2021 and 2022,” he told ET.

Layoffs and job pools shrinking have gotten Indian tech talent worried, affecting morale of several employees, experts said.

“The whole layoffs have kind of brought the mood down, the sentiments are not conducive,” Mishra of CIEL HR said. “Leaders have a lot of work to do to make sure that there is optimism and there is hope, and there is some positive energy flowing in.”