Oyo Rooms, Ola, Paytm, Uber Eats Layoffs: India’s Biggest Startups Are Firing Thousands Of Employees To Survive
After the textile and auto industry, here comes a report from startup unicorns like Oyo, Uber who are preparing to handover the next set of pink slips to their employees.
How Did This Happen?
According to sources “Today what is happening is that they are being told their roles are affected, but they can apply for positions inside Uber. They will be on the rolls of Uber until March 3. In case they want to look for opportunities externally, they will be given outplacement support and services. If the company can’t find them positions by March then they will be eligible for severance,”.
Why Would This Happen?
Basically the unicorn startups like Oyo and PayTm are handing over pink slips to its employees to cut losses and keep up with the ecosystem.
Before this, the ride-hailing giant Ola too laid off around 500 employees or 20% of its staff to cut costs as they get set to launch a public offering in the next few years.
Similarly the digital payment giant PayTm also reportedly laid off nearly 500 employees, late last year.
What Does Expert Say About These Job Cuts?
As the experts say, this marks the beginning of an era where startups have entered a phase of maturity.
This means they might have left their state of extremely high-growth behind to chase stability and most of them, even the most popular ones, have been reeling under losses.
The VP of Recruitment at Teamlease Services, Ajay Shah said “With increasing competition, startups are finding it difficult to keep costs down, laying off staff is one of the solutions that they are choosing to stay in the system. Startups want to offer the best products and services at the most competitive price resulting in these decisions. There would be consolidation and mergers which would result in some layoffs so we might not see hyper-growth per se,”.
According to experts, the layoff in startups are not an aberration or a one-time event but are a part of fundamental corporate strategy as they move towards profitability.
Also, it is an offset of saturation within an organization as a result of a slump in growth.
What About Uber?
If we talk about Uber, it forayed into the food delivery business in 2017 and was banking on heavy discounting to gain and retain customers.
Unfortunately, it failed to make a mark and soon, its operational losses amounted to as much as Rs 2,197 crore, which was much higher than its mainstream ride-hailing business at Rs 1,645 crore.
Which ultimately resulted in a sellout. Also, the platform had over 10 million users, compared to 40 million users of Zomato and 42 million of Swiggy.
On the other hand, Oyo was focussed on bringing in fast growth and profitability.
Although, it reported a mounting loss of Rs 2,384.7 crore in 2019 and also the company had gone through many complications like contractual and legal troubles that led to terminations.