Facebook-Backed Meesho Fires 150 Employees; Indian Startups Have Fired 2000+ Employees In 2022
Social commerce startup Meesho has let go around 150 employees from its grocery arm which became part of the core app and rebranded it to Meesho Superstore last week.
It said in a blog post that it looks to “boost efficiencies in the light of the integration” and has “removed redundancies” of a “small” number of full-time roles and certain third-party positions on six-month contracts.
These redundancies will have no effect on any positions at the core Meesho marketplace business, where it will continue to hire and grow talent.
Meesho is providing the sacked employees with severance packages and outplacement assistance to help them secure new jobs.
Affected Roles, No Prior Notice
The roles that have been affected are city level managers, product, design and executives who worked on the Superstore’s user interface.
A source said that none of the employees had been given prior notice about their terminations.
It expects to complete the integration of the grocery business by the first week of May.
The integration will provide the company’s 100 million+ users access to over 87 million active product listings across 36+ categories on a single platform.
The startup launched a pilot in Karnataka to make online grocery shopping affordable for first-time users.
It has since then expanded its grocery offering to 5 states -Maharashtra, Telangana, Andhra Pradesh, Gujarat, and Madhya Pradesh.
Reducing Cash Burn Ahead Of IPO
Sources claim that the company is looking to shift to grocery business to do away with its reliance on city-level executives.
They also believe that the layoffs are an attempt to reduce cash burn ahead of its public listing in the first half of 2023.
It posted a revenue of Rs 792.8 crore in the fiscal year 2021 and its losses were at Rs 498.6 crore.
It faces tough competition from ecommerce giants such as Amazon, Flipkart and JioMart.
As a result, it has been burning around $20-25 million per month which touched highs of as much as $50 million per month earlier this year.
With Rs 1,337.3 Cr in expenses and Rs 792.8 Cr in revenue, Meesho spent Rs 1 to earn 0.59 paise in the year ended March 2021.
String Of Startups Layoffs
Meesho follows a number of startups this year who have laid off scores of employees.
Some of them are Unacademy, Furlenco, Trell, OkCredit and Lido.
Meesho’s total headcount now stands at 2000 and it is not planning to downsize any further.