The year 2024 was a mix of relief and reality checks for startup ecosystem in India. The celebrating aspect was a drop of 80% in layoffs compared to the previous year. The layoffs in 2023 were 24,000 while in 2024 it dropped to just 4,700. Job cuts were witnessed even in well-known startups such as Reshamandi and Swiggy. However, the percentage of their job cuts was less compared to that of 2022 and 2023.
Shutting down of 17 startups in 2024 became a concerning factor as it was more than that of 2023. Previous year had 15 closures and the gradual rise in shutdowns reveal funding cannot be acquired just by an idea. Startups like Resso, Koo and Kenko Health had to close operations due to failure in overcoming market or regulatory hurdles. Koo was once considered as India’s answer to Twitter, but its closure means that bold ideas alone are not enough to survive.
Leadership in startups also witnessed a shake-up equipped with more than 100 top executives stepping down. However, more than 200 key positions were simultaneously filled and it is a gesture that many companies are preparing for a fresh start with new strategies.
Another area that witnessed a decline was ESOP activity. Employee stock ownership plans once symbolized startup success, but now the payouts and buybacks dropped to $190 million in 2024. The figure was $802 million in 2023.
The sharp reduction in layoffs is encouraging, but the continued closures as well as cautious funding highlight that stabilization is fragile.
