No stopping startup layoffs: Meesho lays off 251 employees, cites judgement errors in over-hiring

In an email to the employees, company co-founder and CEO Vidit Aatrey said, “I have a difficult news. We are reducing the size of the Meesho workforce by 15 per cent, affecting 251 employees.”

Written by Tanya Krishna

May 5, 2023 11:53 IST

layoff, Meesho, startup, hiring, employees, profit, operational growth, costs, macroeconomic environment

Meesho on Friday announced its second round of layoff in just over a year.

Softbank-backed e-commerce platform Meesho on Friday announced its second round of layoff in just over a year, which would affect 251 employees representing 15 per cent of its workforce. In an email to the employees, company co-founder and CEO Vidit Aatrey said, “I have a difficult news. We are reducing the size of the Meesho workforce by 15 per cent, affecting 251 employees.” He cited a challenging macroeconomic environment for the decision and added that the company made ‘judgement errors in over-hiring ahead of the curve’. “At the same time, we could have run our organisation structure in a more effective and lean manner overall,” the email said.

Meesho has been on a cost-cutting strategy since 2022. “We grew by 10X from 2020 to 2022, helped by COVID tailwinds and aggressive investments. Even as we tracked to our plans, the macro climate undeniably and considerably changed. As a result, we have had to accelerate our timeline to profitability as part of project Redbull, while readjusting our GMV growth goals to 30 per cent YoY. While our cash reserves buffer us well for these harsh circumstances, we need to stay highly prudent on the cost front,” said Vidit Aatrey. According to the email, Meesho rationalised all its costs before taking the decision, which included infrastructure costs, discretionary growth spends, tool costs, support and other indirect costs.