Hiring demand is strongest for high-impact technology and product roles, particularly DevOps engineers, product managers, and full-stack developers.
India's tech startup ecosystem is showing early signs of a slow but steady recovery, as companies cautiously expand their hiring capacity following a prolonged funding winter.
According to data from Xpheno, a specialist staffing firm, the total headcount for funded startups closed at 590,000 in FY25 and is projected to rise to 670,000 in FY26.
While hiring trends are not expected to shift dramatically, there is a discernible upward bias.
FY25 saw net additions of 60,000, and projections for FY26 suggest a further increase of 80,000.
The overall tech startup cohort has grown steadily over the past five years, with the closing headcount rising from 250,000 in FY21 to 590,000 in FY25 -- representing gross hiring of 710,000 over this period.
Much of the anticipated growth in FY26 is expected to come from sectors such as quick commerce, e-retail, marketplaces, fintech (including payments, remittances, lending, and credit), and F&B retail.
"The projected net headcount increase this fiscal is driven by these high-growth verticals," said Anil Ethanur, co-founder of Xpheno.
Supporting this outlook, TeamLease Services' Employment Outlook Report found that 69 per cent of employers in the ecommerce and tech startup sectors plan to expand their workforce during the first half of FY26 (April-September).
This hiring momentum is being fuelled by advances in AI-driven product development, growth marketing, and cloud-native engineering.
"Despite a cautious macro environment, there is a clear shift in how India's tech startups are approaching growth and talent," said Kartik Narayan, CEO-Staffing at TeamLease Services.
"The focus has shifted from aggressive expansion to building sustainable, value-driven business models."
This change is evident in how companies are forming leaner teams with sharper, outcome-oriented skill sets -- especially in product and digital roles.
"It's not just about filling positions; it's about building capabilities.
"The resurgence in hiring signals startups' growing confidence not just in funding cycles, but in the long-term promise of India's digital economy," Narayan added.
According to the TeamLease report, hiring demand is strongest for high-impact technology and product roles, particularly DevOps engineers, product managers, and full-stack developers.
An additional hiring trigger this fiscal is the earlier-than-usual festive season. Industry giants like Amazon and Flipkart are already ramping up infrastructure and personnel to prepare.
"As part of our commitment to strengthening our capabilities, Flipkart plans to hire 5,000 employees this fiscal across functions such as supply chain, product, design, engineering, and AI," a company spokesperson said.
Campus hiring, however, remains conservative amid continued macroeconomic uncertainty and the need for highly skilled talent.
Both Xpheno and online jobs platform Apna observed a shift from mass to precision hiring in campus placements over the past 3 to 5 years.
Data from Apna shows that campus recruitment's share in overall fresher hiring fell from 55 per cent in April 2024 to around 40 per cent in April 2025.
"The emphasis is now on upskilling and hiring freshers who can adapt quickly to changing technologies and business needs. Still, about 30 per cent of companies plan to continue campus hiring in 2025, targeting candidates with strong technical and soft skills," said Nirmit Parekh, founder and CEO of Apna.
Going forward, Ethanur believes the startup sector could approach net hiring levels last seen in FY23, with the potential to add around 100,000 in net headcount.
"Attrition could moderate to the 15 to 16 per cent range, prompting backfill hiring of about 1 lakh. The gross hiring outlook for FY26 is approximately 200,000," he added.
Feature Presentation: Ashish Narsale/Rediff
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