It seems that the firing of Housing.com’s co-founder & ex-CEO Rahul Yadav was just a beginning.
Within the next 90 days, 600 employees of Housing.com, or 23% of their entire workforce would be fired. As per a report in ET, the real estate startup is tightening their cash burns, and stepping up focus on core technology and product (which should have been the priority from day 1)
They have already closed down their commercial properties, short stays and land businesses verticals, and even ditching Tier 2 and Tier 3 cities as their sole focus would be on metros and bigger cities henceforth.
As per another report, some of the old-timers from these verticals have been asked to either shift to tech or quit.
A top official from Housing.com said, “Housing is being completely restructured and performance for each employee across departments is being (scrutinized). While some people have been asked to leave because businesses are being shut down, others because of underperformance and in some cases due to overstaffing,”
Some officials are claiming that their biggest focus as of now is to increase revenues via advertisement business.
160 employees from non-core sector have already been fired, and the rest would get the pink slips in the next 3 months. Within their core-sector, that is engineering and product, all non-performers would be sacked along with those employees who were hired for expanding into new cities.
Thus, there are mainly three strong motives which are governing their decision for this mass firing:
- Quit those verticals which are not making money (commercial properties, short stays and land businesses)
- Streamline operations to get more venture funds
- Cut the flab and remove non-techie employees
Soft Bank, which is the primary shareholder in Housing.com having 32% share, has promised to invest another $30 million into the company, in case they are able to meet certain ‘operations related targets’ in the next 3 months. This mass firing of 600 employees is clearly a part of this program as Housing.com is desperately attempting to survive in this brutal market.
In June, rumors started floating that Quikr may acquire Housing.com; and there can be a possibility that this ‘restructuring’ process has been done to make it more presentable for future buyers.
Meanwhile, as we visited ex-CEO Rahul Yadav’s Facebook profile to catch some reaction on this news, we found that he has consumed a banned drug called LSD at Pangong Tso Lake (India-Tibet border).
This was his last Facebook status: “Just had LSD at Pangong Tso Lake. Whoa!”
The question now is, what will be the future of Rs 1500 crore worth Housing.com and their remaining 2000 employees; and where will they ‘look up’ to now? Will it turn into a huge debacle as the startup is clearly missing the ‘mojo’ of passion and innovation? Has the bubble finally started to burst? (Soft Bank President Nikesh Arora has already said that start-up valuations are far ahead of reality)
Or will it rebound itself to prove all their detractors wrong?
We will keep you updated as more details come in.