SUMMARY
Meesho’s cofounder and CEO Vidit Aatrey informed the employees of the decision in an email earlier on Friday (May 5)
“As leaders, we made judgement errors in over-hiring ahead of the curve”, said Aatrey in the email sent to Meesho employees
The latest retrenchments take the total number of employees fired by Meesho to more than 700 in the past 12 months
Ecommerce unicorn Meesho has fired 251 employees or about 15% of its present workforce of 1,675 as a part of a cost-cutting exercise.
The layoffs at Meesho come about nine months after it fired 300 employees last August and more than a year after the startup laid off 150 employees last April. This round takes the total number of employees fired by Meesho in the present adverse macroeconomic environment to more than 700.
The ecommerce giant’s cofounder and CEO Vidit Aatrey informed the employees of the decision in an email earlier on Friday (May 5). Inc42 has seen the email.
“As leaders, we made judgement errors in over-hiring ahead of the curve. At the same time, we could have run our org structure in a more effective and lean manner overall. Our spans and layers were inflated, and this could have unintended consequences on our speed to execute,” said Aatrey in the email.
The cofounder added that the change in the macroeconomic environment has seen Meesho expedite its timeline to profitability. “I want to reiterate that the decision around who is impacted has nothing to do with performance, and only to do with our business reality,” the Meesho cofounder added.
Aatrey also said in the email sent to Meesho employees that the company had readjusted its GMV growth target to 30% year-on-year (YoY), claiming that the ecommerce unicorn grew 10X between 2020 and 2022, “helped by COVID tailwinds and aggressive investments.”
A Meesho spokesperson confirmed the layoffs, stating, “We have taken a difficult decision to part ways with 251 Meeshoites constituting 15% of the employee base, as we look to work with a leaner organizational structure to achieve sustained profitability.”
The spokesperson added that the exiting employees will be entitled to a separation package that includes a one-time payment of 2.5-9 months, depending on the tenure and designation, insurance benefits, job placement support and accelerated vesting of ESOPs by one year.
Founded in 2015 by Aatrey and Sanjeev Barnwal, Meesho has raised more than $1 Bn in funding from investors such as SoftBank, Prosus, Meta, Fidelity Management and B Capital Group, among others. The startup is currently valued at $4.9 Bn.
Meesho saw its net losses widen by more than 6X in FY22, reaching INR 3,247.8 Cr on a standalone basis during the period under review from INR 498.6 Cr reported in the previous fiscal year. At the same time, the ecommerce unicorn’s total revenue jumped to INR 3,359.4 Cr in FY22, 4X up from INR 838.6 Cr it reported in FY21.
Incidentally, the startup’s employee benefit expenses also stood at INR 509 Cr in FY22, a 3.4X jump from INR 149.3 Cr it reported last year.
India’s startup ecosystem is going through the worst funding drought since the start of the COVID-19 pandemic, which has seen widespread layoffs within the ecosystem since the start of 2022. According to Inc42’s ‘Indian Startup Layoff Tracker’, Indian startups have fired nearly 26,000 employees.
