DealShare, the e-commerce platform, will be firing 100 employees or just over 6% of its total workforce of 1,500 people in a restructuring move, Sourjyendu Medda, founder and co-CEO, told FE.
The decision to sack employees comes at a time when DealShare’s annual recurring revenue (ARR) has fallen by a third, from around $900 million to $600 million over the past year. Medda said the company remains well capitalised but was downsizing new divisions which were started as experiments.
The Tiger Global-backed startup will tap the brakes on geographical expansion and go slow on the marketplace model as demand wanes and was “likely to remain slow for another year at least,” according to Medda.
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All the 100 employees that are impacted by the decision will, however, serve their three-month long notice period, after which DealShare will provide assistance in finding new jobs. Medda said the decision to lay off employees was not because there was a cash crunch. The company has a cash runway of over 48 months. Cash runway is the number of months a startup can continue to function in steady state.
Speaking on the scale of slowdown, Medda said DealShare had grown 13X in 2021 but that had now slowed to around 50%.
“As part of our business restructuring plan and to sustain growth, we have taken a difficult decision to reduce the size of the team by 100 employees which constitutes only 6% of the company. We have taken adequate measures to compensate the affected employees,” Medda said.
DealShare, founded in 2018 by Vineet Rao, Sourjyendu Medda, Sankar Bora, and Rajat Shikhar, joins a growing list of new-age companies which have let employees go as they pave their path towards profitability and realign businesses. Several startup heads have said they over-hired in 2020 and 2021 after over-estimating the growth potential but the demand seems to be petering out now.
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In January alone, Indian startups have laid off over to 2,600 employees, including large players like Swiggy which has sacked 380 employees, ShareChat which has cut 600 roles, Google-backed Dunzo, SoftBank-funded Unacademy’s Relevel, Lead, Exotel, Ola, Rebel Foods, Hubilo, Innovaccer, among several others have all sacked staffers this year, with predictions these numbers could go higher as the year progresses. Even large big tech companies like Spotify, Microsoft, Google and others have not been spared by the slowdown and have axed thousands of jobs this month alone.