Startups are not for the faint-hearted or security lovers. That's the message that rang out loud and clear this week as news emerged of a new round of shutdowns and layoffs in startups. One consulting report talked of more than 4,500 lost jobs over the past eight months, after an annual survey by a startup-focused website recorded a total of 9,500 in 2025. Companies such as Zepto, Krutrim, Porter, Simpl, Zupee have all had to let their employees go by the hundreds.
The reasons for job losses vary from tighter funding and regulatory requirements on gaming to the latest shocks to software engineers from artificial intelligence (AI). Layoffs in 2024 were higher at 17,000 as the hangover from the Covid-19 pandemic took its toll on jobs.
The Indian figure of 9,500 for 2025 is nothing compared with the comparable one million number for the United States, where the economy is booming but technology-driven changes remain volatile.
Why LivSpace Fired 10,000 People
The latest slayer in town is Anthropic, whose code-generating Claude has sent stock markets into a tizzy. Startup founder Ira Bodner triggered a social media debate after announcing that her advertising product Ryze AI had been effectively killed overnight by Claude AI. Home decor startup LivSpace recently laid off around 1,000 workers, publicly stating that the layoffs were being done to save costs and run operations using AI.
Nothing in all that will surprise either long-time startup watchers or those who were old enough when they watched the "dotcom bubble" circa 2000, when big-talking consumer Internet startups mouthing abbreviations like B2C (business to consumer) and B2B (business to business) fell like ninepins. As it happened, B2C eventually meant "back to corporate jobs" for some and "back to boredom" for others.
Barely grown-up Gen Z kids and hardly-adulting Millennials need to learn some basics as venture funding eases up and job relevance gets reality-checked in the AI surge amid other global uncertainties, ranging from President Donald Trump's idiosyncratic economic policies to geopolitical war clouds.
The triggers change, but not the very ideas of volatility.
Beyond The Hip Offices
Startups are considered glamorous precisely because they create new-age giants in an atmosphere of uncertainties that spell both opportunities and threats, both for individuals and businesses. If you are a startup employee riding a rollercoaster, be prepared to take the slides with the steep highs and realise that in a real-world scenario, falls can hurt.
But this is no case for pessimism. A diagnostic check on your personal risk appetite, true life goals and learning abilities is necessary if you are in a startup journey or wish to join it. Measuring one's optimism-to-despair ratio is healthy.
The broader context of an industry or economy also matters.
First up, check out the grey startups. Theoretically, even a corner coffee shop with a global branding plan is a startup. After all, Starbucks got listed on the tech-heavy Nasdaq. The rise of ubiquitous technology offshoots like smartphones and social media apps makes every small business call itself a startup. But, in effect, only those that have tech-heavy value that disrupts industries on a large scale, especially with new product or service categories, deserve that label. Startups as a social 'flex' are of a recent vintage and are soft targets in a shakeout scenario.
Technology shifts really test people when they change faster than one generation can possibly manage. A report shows how nearly 46% of startups had to restructure their operations last year because of slowing demand, fund crunch and mounting operational expenses.
In India, labels like the government's Startup India scheme have fired the imagination of youngsters but real startups are scalable in themselves or are capable of being unique partners in a business ecosystem that thrives on scale or specialisation. Government figures on the Startup India scheme estimated that India had generated 2.1 million jobs in about 200,000 startups over the past decade. In that kind of a universe, a few thousand jobs lost over a few months is no big deal.
Why Startups Are What They Are
The good news is that India is entering a Silicon Valley mood: failure after having tried carries no stigma. In fact, some big companies hire former startup employees in the hope that they will bring energy and innovativeness to the bureaucratic cultures of large companies.
A new startup may also welcome discards from old ones because of their experience. As Infosys co-founder N.R. Narayana Murthy used to say: "Love your job, but never fall in love with your company, because you never know when the company stops loving you."
Loving your job is not the same as staying put in repetitive tasks - which is precisely where technology disruption hurts. What cannot and should not stop is the business of reinvention - of companies or individuals.
What perhaps separates the men and women from the girls and boys in a startup culture is the ability to 'pivot' - like a batsman doing a reverse sweep in a T20 match to beat tight field positions.
Startup folks only have to look harder to see where they fit better. Startups are what they are precisely because capitalism thrives on higher rewards for greater risk and on continuous innovation to create value or boost efficiency. Risk-taking also generates learning that can help.
In an age where trendy co-working office spaces have replaced humble garages as startup symbols, the current slump is best seen as a mirror to show some deeper realities. Startups are an option. Waking up is compulsory.
(Madhavan Narayanan is a senior editor, writer and columnist with more than 30 years of experience, having worked for Reuters, The Economic Times, Business Standard, and Hindustan Times after starting out in the Times of India Group.)
Disclaimer: These are the personal opinions of the author
