India’s Unicorn Startups See 39,000 Employee Exits in a Month, Attrition Rate Reaches 4.5%

India's 116 unicorn startups have witnessed an average attrition rate of 4.5 per cent for the period between August 2023 and August 2024, according to a report by PrivateCircle Research. During that period, the unicorns' workforce saw a net decrease of 6,700 employees, the report said.

It also highlighted that 116 Indian unicorns employed 4,10,829 people in August 2024 as compared to 4,17,561 employees recorded in August 2023. The hiring in unicorns peaked in March 2024 at over 42,000 cumulative employee additions after 39,000 employees left unicorn companies in September 2023. The report attributed this to either layoffs or employees quitting their jobs.

It noted that unicorns including Zerodha, Zoho, and MapMyIndia managed to maintain attrition rates of around 1 per cent or lower. On the other hand, Ather Energy, Druva, Dream Sports, Icertis, and Uniphore among others had a attrition rate below 2 per cent.

The attrition rate is basically a metric to measure how quickly employees leave a company over a period of time.

Mass Recruiters

During the survey period, Delhi NCR witnessed the most additions in the total number of employees across all major startup hubs. Some of the major mass recruiters from the region are PolicyBazaar, Blinkit, and Zomato. The second-highest employee additions were registered in Chennai based unicorns, followed by Bengaluru.

Interestingly, Mumbai-based unicorns recorded a net decrease of 7,024 employees from the cumulative workforce. Likewise, Pune and Hyderabad have also saw a decrease in their overall workforce numbers.

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"We find that the compounded revenue growth among most unicorns has been in high double digits over a two year period and yet these unicorns have maintained stable employee numbers. This signals efficient usage of human capital even during periods of high growth," said Murali Logananthan, Director of Research at PrivateCircle.

He also informed that the monthly net change in unicorn workforce has stayed between -0.9 per cent and 2.5 per cent during the selected period.

However, the analysis only surveyed employees for whom provident fund (PF) contributions were made.

India's Unicorn Ecosystem

India's start-up ecosystem is ranked third globally in terms of unicorn count and it boasts 118 unicorns, with six new additions this year. Five of these new unicorns belong to the India's tech-hub Bengaluru. These include - Ather Energy, Krutrim, Moneyview, Perfios, Rapido and RateGain.

India's 118 unicorns have collectively accumulated over $100 Billion in funding to date.

India is trailing only the United States and China in unicorns. The combined valuation of India’s unicorns estimated at $186 Billion.

Unicorn startups are innovative and disruptive companies across sectors liek fintech, technology, healthcare and finance among others. They not only experience rapid growth but also attract significant investment from investors.