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- Published on August 22, 2025
- In AI Startups
How Indian AI Startups are Responding to IT Layoffs
The reallocation of talent in Indian AI startups presents potential benefits, although challenges with retention persist.
Image by Nalini Nirad
- By Smruthi Nadig
An unusual opportunity has emerged for AI startups amid massive layoffs across the IT sector in India. Early signs suggest the adaptability of both the displaced workforce and startups could shape India’s AI landscape in unexpected ways.
Startups are embracing laid-off IT professionals, seeing an opportunity to bolster their engineering teams, without the immediate costs of hiring fresh graduates and training them.
The question of retention, however, remains pivotal. While these hires may be a quick fix to address skills shortages, startups need to consider whether they can sustain such hires over the long run. “There may be some integration challenges, laid-off employees might have higher expectations based on previous roles and the company from which they were laid off,
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Smruthi Nadig
Smruthi brings over two years of experience in reporting on the global energy industry. They hold a Master's Degree from the University of Leeds in International Journalism and a Bachelor's Degree from Christ University in Media Studies, Economics and Political Science.
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