Layoffs here, layoffs there, layoffs layoffs everywhere! There have been so many job losses in the startup sector recently. From not being able to raise funds to not being able to stay firm in a competitive business environment, these are some of the reasons given for sacking the employees. All the people who lost their jobs were even given an opportunity by Paytm Founder Vijay Shekar Sharma. Recently Sharma tweeted, “Hello, Tech/Product people in Delhi NCR, feeling the heat of business restructuring? We welcome you @Paytm and @Paytm-Mall with open arms.” Let’s have a look at the startups that sacked their employees recently:
Snapdeal: Last month, Softbank-backed e-commerce marketplace Snapdeal began a massive lay-off exercise of its employees across its business verticals. It showed the door to over 600 people across Snapdeal, its logistics arm Vulcan and FreeCharge, the digital payments business, according to sources close to the development. The company is estimated to have 8,000 employees on its rolls. co-founders of the company Kunal Bahl and Rohit Bansal have also announced that they will take a 100% salary cut. More employees are expected to be laid off shortly. Of late, the company has been struggling to raise funds to compete with its rivals Amazon and Flipkart in the Indian e-commerce marke. Snapdeal reported a loss of Rs 3,316 crore in FY16, on a revenue of Rs 1,457 crore.
Yepme: Recently Yepme, run by Vas Data Services, confirmed laying off 30 people. Sandeep Sharma, co-founder of Yepme, told FE the firm has outsourced both warehousing and quality control to third-party agents. “Consequently, about 30 people involved in the operations have been asked to go,” Sharma explained. Yepme typically sells fashion apparel and accessories under its own brand. In 2015-16, the company reported revenues of Rs 130 crore and a loss of Rs 96 crore.
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Craftsvilla: Online ethnic fashion portal Craftsvilla sacked 100 people mainly from the merchandise and technology departments. Emails sent to Craftsvilla did not elicit a response. In FY16, Craftsvilla Handicrafts reported net sales of Rs 37 crore and a loss of Rs 119 crore. Evaluating niche players like Craftsvilla, an industry expert pointed out that Craftsvilla had performed well on the supply side by introducing ethnic wear but was unable to create demand. “It lost out on the market share to larger horizontal players such as Flipkart and Amazon and that drove up the customer acquisition costs for the company substantially,” he said.
StayZilla: Chennai-based online hotel room aggregator Stayzilla also decided to shut shop because of intense competition in the market and tighter business environment. In a blog post, company co-founder Yogendra Vasupal said the decision was “was one of the toughest decisions that I have taken so far but it is the right thing to do”. Vasupal said the company was not able to sustain its current model for several reasons, including the overall cost of doing business in India.
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Tolexo: According to reports last week, online business goods marketplace Tolexo Online Pvt. Ltd will lay off 300 employees, or 85% of its workforce. “The move is part of the company’s plans to wind up its online business to launch a completely new offline initiative,” the reports said. The company had reported net sales of Rs 4.69 crore in 2015-16, against Rs 26.5 lakh in the previous fiscal year, according to VCCEdge, the financial research platform of VCCircle. However, its net loss had widened three and a half times to Rs 72.9 crore from Rs 12.9 crore, and total expenses had surged to Rs 76.6 crore from Rs 13.2 crore, during the period.