OPEN said that the employees were let go based on performance evaluation
The startup also stated that all four of its cofounders have taken a 50% pay cut
The impacted employees have been paid a one-month notice period worth of salary
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Neobanking unicorn OPEN has joined the growing list of fintech startups firing employees by laying off 47 employees. The retrenchments were done based on performance evaluation, the neobank said.
“While 47 Openers were exited based on performance, the company is actively recruiting for critical functions such as growth marketing, product, and sales functions to continue growing the business and better serve its customers,” OPEN said in a statement.
OPEN, which became India’s 100th unicorn last year, also said that all four of its cofounders have taken a 50% salary cut. However, it added no other employee will be subjected to any such pay cuts.
While the startup hasn’t provided a severance package, it has given a one-month notice period worth of salary to the impacted employees.
Speaking on the layoffs, OPEN cofounder and CEO Anish Achuthan said, “Our recent staffing changes were driven solely by performance evaluations. We also ensured deserving high performers get 20-30% average hikes and ESOPs.”
He added that OPEN is still hiring across critical functions and has a runway of about 30 months.
“As a part of scale up and profitability, OPEN will continue the efforts to make a highly performance-oriented effective organisation fit for scale and is one of the very few startups with visibility on profitability and runway above 30 months to well face the market conditions,” said the cofounder.
The development was first reported by Entrackr.
The neobank joined India’s unicorn club in May 2022 after raising $50 Mn in its Series D funding round led by IIFL.
OPEN reported a 155% year-on-year (YoY) rise in its standalone net loss to INR 167.5 Cr in the financial year 2021-22 (FY22) as its expenses grew in line with the business growth. Meanwhile, the startup’s operating revenue jumped over 617% or 7.1X to INR 40.9 Cr in FY22 from INR 5.7 Cr in the previous fiscal year.
Incidentally, the neobank spent INR 107.1 Cr towards employee benefits during the year, up 2.3X from INR 46.9 Cr in FY21. While it paid INR 78.6 Cr in salaries, wages, and bonuses, OPEN also spent INR 22.5 Cr on employee stock compensation expenses.
The layoff at OPEN makes it the 92nd Indian startup to have fired employees since the start of 2022. According to Inc42’s ‘Indian Startup Layoff Tracker’, 16 fintech startups, including OPEN, have fired more than 1,400 employees as a sustained funding winter continues to plague India’s startup ecosystem.
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