SUMMARY
The startup claimed that the employees were shown pink slips over performance issues
Despite being in the middle of retrenchments, Practo said that it was planning to hire 500 employees in the next 12 months
Practo joins healthtech startups such as Pristyn Care, Innovaccer PhableCare and MediBuddy that have conducted layoffs this year
Joining a host of other healthtech peers, Practo has now fired 41 employees as part of its performance management and planning process.
In a statement sent to Inc42, the startup confirmed the development saying that it will provide all requisite support to the impacted employees. At the same time, the company claimed that it was not undergoing any restructuring exercise and that the employees were handed pink slips over performance issues.
“… as part of our continuous performance management and planning process, we had to part ways with 41 employees in accordance with their employment contracts. As always, we are and will remain fully committed to providing the requisite support to all employees who may be impacted,” a company spokesperson said.
While noting that its revenues, margins and profits were at an ‘all-time high’, Practo said that upholding a ‘high bar for performance and productivity’ was crucial for growth. It was not immediately known which departments were impacted as part of the retrenchments.
Interestingly, the healthtech startup said that it was also planning to hire 500 employees, including backfill, in the next 12 months.
Practo currently employs more than 1,600 people, according to the company’s LinkedIn profile.
While 41 accounts for a small chunk of the impacted workforce, the move is emblematic of the larger trend of retrenchments that have plagued Indian healthtech startups.
Weeks ago, it was reported that healthtech unicorn Pristyn Care fired around 300-350 employees in two months. However, the platform claimed that it only laid off around 45 employees over performance issues.
In February, Phablecare fired 350 employees, or nearly half of its workforce, amid a funding crisis due to which the startup has also withheld the salaries of hundreds of its employees.
In January, Tiger Global-backed healthtech unicorn Innovaccer handed out pink slips to 15% of its total workforce, or 245 employees, in its second round of layoffs.
Another healthtech startup MediBuddy also showed the door to 200 employees acoss tech, product and sales teams after conducting a restructuring exercise in January.
While Indian healthtech startups grew at a break-neck during the funding boom of 2021, the funding crunch of 2022 has squeezed these players in a corner. These players have largely been in the dock for reasons such as high cash burn, mounting losses and no clear path to profitability.
A case in point has been startups such as HealthifyMe, which saw its losses widen eightfold to INR 157 Cr in the financial year 2021-22 (FY22).
Similarly, Gurugram-based Healthians also saw a sharp rise in losses to INR 122.36 Cr in FY22, up 2.7X from INR 44.51 Cr in FY21.
Making matters worse have been regulatory issues for a section of the healthtech space (epharmacies), which have been in the line of fire for concerns related to predatory pricing and data privacy. It was recently reported that the Centre was even mulling banning online pharmacies over issues flagged by critics.
With matters expected to worsen over the year, it remains to be seen how these healthtech players scale up and stay afloat going forward.
