Indian Startups See Sharp Rise in Layoffs Amid Global Trend

Layoffs at Indian startups have risen sharply in the first quarter of 2026, even as the number of companies resorting to job cuts remains limited. Three startups – Livpace, Flipkart , and Zupee – together laid off around 1,700 employees in Q1 2026, compared with 1,102 employees across three companies in the same period last year, according to data from layoffs.fyi. In line with the broader AI-related job cuts, several startups have also cut down their team size, hoping large scale AI adoption will help leaner teams drive greater productivity. Livpace accounted for the largest share of job cuts this quarter, laying off nearly 1,000 employees, or 12% of its workforce. The company said in a statement it is reorganising its internal teams to become “an AI-native agentic organization,” and emphasised that it is not a “reactive cost-cutting measure”. Livspace is also working on reducing its losses, while its topline growth moderates. In FY25, the company shrank its losses to Rs 242 crore from Rs 416 crore, while revenue grew 23% to Rs 1,460 crore. In FY24, revenue growth was 21%, while in FY23 it was 85%. Flipkart, owned by Walmart, reduced its workforce by around 500 employees as part of its annual performance review. It had carried out similar performance-based job cuts in the past as well. Its last major round of layoffs was in January 2024, when it fired around 1,000 employees, or 5% of its workforce. Besides these, gaming platform Zupee cut about 200 jobs, as it reorganises its business post the ban on real-money gaming. Prior to this, in September, the company had cut another 170 jobs. In the year-ago quarter, Ola Electric had cut nearly 1,000 jobs as it struggled with mounting losses. So far, the trend in India mirrors the wave of layoffs globally. Across the world, 81 tech companies laid off more than 70,000 employees in Q1 2026, a significant increase in the scale of job losses compared to Q1 2025, when 101 companies collectively laid off nearly 30,000 employees. Major layoffs this quarter included Oracle firing 30,000 employees in March and Amazon laying off about 16,000 people in January. While fewer companies are initiating layoffs this year, the extent of mass layoffs has increased substantially. Analysts attribute the global trend to continued macroeconomic uncertainty, tighter funding environments, and a sustained shift toward automation and AI-led cost savings. Many of these tech firms are also correcting pandemic-era overhiring, leading to waves of layoffs periodically. In India, however, the impact appears more concentrated. Startups are becoming more cautious with capital allocation as venture funding remains selective. In the first three months of this year, Indian tech startups raised $3.95 billion across 350 rounds, nearly the same as last year but in barely half the number of deals. In Q1 2025, tech startups had raised $3.93 billion across 628 rounds, as per Tracxn data.