Neobank OPEN has laid off 47 of its employees based on performance evaluations, the company said in a statement on Thursday. The company stated that these changes were made as part of its ongoing efforts to optimise operations and ensure the best possible team is in place.

However, OPEN also said that it is actively recruiting for critical functions such as growth marketing, product and sales functions to continue growing the business. The founders of OPEN have also taken a 50% pay cut to lead the way towards scale and profitability.

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Startup news portal Entrackr first reported on the layoffs at OPEN and added that the startup had paid employees only one-month severance. The startup has, however, added in its statement that none of its existing employees’ salaries have been reduced.

“Our recent staffing changes were driven solely by performance evaluations. We also ensured deserving high performers get 20-30% average hikes and ESOPs. We are one of the very few startups with visibility on profitability and runway above 30 months to well face the market conditions,” Anish Achuthan, co-founder and CEO, said in a statement.

Six-year-old OPEN became the 96th entrant to India’s unicorn club when it last raised a Series D funding round worth $50 million at a valuation of $1 billion in May 2022. The funding round transpired when banking startups, catering to both consumers and SMEs, became an epicentre for fintech deal activity, as investors began to pour billion into Internet startups. Termed ‘neobanks’, these startups operate, unlike traditional banks, with digitally managed bank accounts and without a brick-and-mortar presence.

Founded by Achuthan, Mabel Chacko and Ajeesh Achuthan, the Bengaluru-based firm currently works to automate business finances for small and medium enterprises and claims to power over 2.3 million SMEs — crossing over $30 billion in annualised transactions.

The company claims to have raised over $140 million in funding since its inception. It counts Temasek, Google, Visa, Tiger Global, Beenext, Recruit Strategic Partners, 3one4 Capital, Speedinvest, Tanglin Venture Partner Advisors, Angellist, and Unicorn India Ventures as its investors.

OPEN is one of several Internet startups that have resorted to layoffs to conserve cash due to an acute funding slowdown in 2022 which is continuing into 2023. Around 1,024 tech companies globally, including both big tech firms and startups, laid off 154,336 employees in 2022, making it the worst year in a decade for tech roles. Last year’s layoff wave exceeded all previous records, with retail, consumer, transportation, and finance-related tech companies firing most of the affected employees.

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November 2022 witnessed the highest number of tech layoffs, which impacted close to 51,800 employees across 2,017 companies in India and globally. The last time the number breached these levels was at the height of the Covid-19 pandemic in Q2 CY2020, when 428 tech companies fired at least 60,000 employees. After that, layoffs had tapered to a minimal level, but have picked up pace alarmingly since Q1 2022 without any signs of a slowdown, according to layoff.fyi data.