Mounting layoffs, financial uncertainty, and decline in growth momentum amid funding challenges in startups are pushing many to look at options at large firms that have more dollars to innovate and experiment, top industry officials and venture capital investors told ET.
“The risk-taking appetite of professionals working in startups is diminishing due to the funding challenges and flurry of layoffs in the last several months,” said Ankur Pahwa, managing partner of venture capital fund PeerCapital.
“The resulting financial as well as career and growth uncertainty is prompting many to take to the safety net of large established companies,” he added.
In a survey by Ciel HR Services across more than 900 senior professionals in 60 Indian startups that together employ over 60,000 people, 80% of the respondents confirmed that senior talent is migrating to established firms because of the current volatile market.
In the survey, shared exclusively with ET, 47% said lack of job security is one of the major reasons prompting the move, while 27% cited better work-life balance and 26% pointed to better pay at established firms.
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“There are arising number of senior people searching for jobs in more established companies and traditional sectors in the last few months,” said Aditya Narayan Mishra, CEO, Ciel HR Services. “The layoffs are making them worried. People are unsure about the future at startups.” Plus, there is a pull factor. Many large traditional businesses — across sectors such as banking, insurance, fast-moving consumer goods, healthcare and pharmaceutical — are scouting for top-notch talent to mainstream their digital footprint.
“There is a push factor from startups due to the volatile market, while there is a big pull from traditional firms that are looking at strengthening their digital presence,” said Anshuman Das, CEO of executive search firm Longhouse Consulting.
“These companies need senior talent to drive their tech transformation journey,” said Das.
According to data put together by Longhouse Consulting, some of the senior-level moves from startups to large companies in the last one year include Kamal Rathi, who moved from Paytm to Kotak Mahindra Bank as senior executive VP technology; Mriganki T, who moved from Nykaa to Colgate-Palmolive India as associate director ecommerce; Divakar Prayaga, who moved from CoinDCX to AP Moller — Maersk as director cyber engineering; Sandeep Kumar Pandey who moved from Udaan to Aditya Birla venture TMRW House of Brands as head of sourcing; Amit Golash, who joined Dr Reddy’s Laboratories as global head of customer services and logistics from Flipkart; Shakti Agrawal, who moved from Flipkart to Kotak Mahindra Bank as product head SME digital platform; and Amit Nayyar, who moved from Paytm to JP Morgan as managing director.
The flight of top talent from new-age firms comes after a couple of years of unprecedented surge in hiring by many startups. The hiring activity dropped significantly by October last year. Data from Ciel HR Services shows that the decline was much sharper in the case of senior leadership-level hiring, which fell by 82% in the fourth quarter of 2022 compared to the first quarter.