June 2022 \ Business & Investment \ BUSINESS NEWS—STARTUPS
Layoffs despite startups being flush with funds

After funding galore that saw more than $42 billion flowing in the Indian startup ecosystem last year alone, the current layoff season has shaken up the country’s workforce, especially the young, who quit traditional, stable companies to join startups at crazy packages

By Nishant Arora

Zomato-owned Blinkit (earlier Grofers) has laid off more than 1,500-1,600 employees owing to “cost-cutting”, in cities like Mumbai, Hyderabad, and Kolkata looking to cut costs and reduce cash burn, according to media reports.

Zomato invested $100 million in Blinkit for a 10 percent stake at a valuation of $1 billion, right before its IPO in July last year. E-commerce platform Meesho has fired over 150 full-time employees from its grocery business as part of “restructuring” of “Meesho Superstore which is aimed at bringing in efficiencies” Furniture and lifestyle rental brand Furlenco has laid off over 180 employees as it scaled operations in several parts of the country.

“The decision is a part of a larger cost restructuring exercise to focus on creating an asset-light model,” according to Furlenco. Social commerce startup Trell asked more than 300 employees to go as it had to do “some right-sizing within the firm”. According to Ritesh Malik, doctor-turned-entrepreneur and investor, the country will see a lot of casualties in coming months, especially for startups who raised a lot of money without a proper product-market fit (PMF) model.

“This funding winter is a downtime for the ecosystem but is a very good time to actually work on building frugal machinery, consolidating and also ensuring reflection by leaders to ensure unit profit is at the centre of their foundership,” Malik told IANS. The entire startup ecosystem must reflect, learn, conserve cash and get ready for a turbulent phase ahead. “The founders need to wear their seat-belts and focus on NPS (net promoter score), customers and teams,” said Malik.


Tags: Zomato, Startups, BYJU

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