Covid19 Tech Impact
Latest updates & innovations, in-depth resources, live webinars and guides to help businesses navigate through the impact of the COVID19 pandemic on India's economy.
The countrywide lockdown has further stretched the burden of survival on the Indian startups. With cost-cutting measures in place, several job cuts are already done, people are on temporary leave while others have been asked to take pay cuts. And this is not all, as the lockdown increases, there is another wave of layoffs expected in the next few months by the market watchers.
Right now, there are only two choices for business— either survive or save jobs. Either way, the costs are high. The debatable concern is that would you rather save jobs right now and risk losing the business entirely in the next few months or save the business right now at the cost of human capital?
It’s a real-life ‘Sophie’s Choice’ and there is no right or wrong answer, but each choice will lead businesses down a different path. So, every business is doing the best they can — revisiting costs and identifying the right cost to cut to stretch the runway.
As the ecosystem faces uncertainty about the future, there are companies resorting to various decisions to help in the crisis. Inc42 has compiled and verified the data of the pay cuts, layoffs and furloughs happening in the ecosystem directly from companies or our sources.
PaisaBazaar Lays Off 1500 Employees
SoftBank portfolio company PolicyBazaar’s lending unit, PaisaBazaar has reportedly let go of over 1500 employees to cut costs amid falling demand in the lending industry. The company had laid off more than 1500 employees with majority job cuts are from operations, technology, and marketing.
This was further confirmed that the company has seen its demand fall by almost 90% and the employees are serving a month’s notice period. The reports added that nearly 100 employees along with some senior executives have been absorbed into PolicyBazaar.
BharatPe Lays Off Employees
Digital payments player BharatPe has resorted to layoffs after announcing appraisals for its team earlier. The company has reportedly laid off 40 people and asked them to resign in April. The report added that the company refused to pay salaries for March and few days of April, asking employees to handover laptops first. However, the company says that it has let go of underperformers and is still hiring.
MakeMyTrip Lays Off 350 Employees
Online travel aggregator MakeMyTrip founder Deep Kalra and CEO Rajesh Magow told employees in a letter that the company has to resort to rightsizing the team as pandemic has changed the context and viability of some of its business lines in its current form.
The company has hence decided to lay off 350 employees as its business has taken a severe hit due to the Covid-19 pandemic. The internal email, shared with Inc42, told employees that over the past two months, MMT has analysed impact closely and have spent considerable time thinking about the path to business recovery.
The company said that it is offering support to these employees including Mediclaim coverage for individuals and their families till the end of the year, leave encashment, gratuity, retaining the right to exercise part of RSUs as applicable, retention of company laptops and outplacement support apart from salary payments as per their notice periods.
BookMyShow Resorts To Downsizing
BookMyShow founder and CEO Ashish Hemrajani in an email to its 1450 employees today informed that it has to downsize its team by laying off and furloughing 270 members of the team across functions. The furloughed employees will get medical insurance, gratuity and other benefits as per their employment standards.
As for laid-off employees, the company is offering equivalent to a minimum of 2 months of salary irrespective of their tenure or as per notice period, whichever is higher. The employees will also get medical insurance benefits till the end of the year and get outplacement support.
Hemrajani further said that teams that are staying back have voluntarily taken salary cuts ranging from 10% to 50% at the leadership level, given up their bonuses and all salary raises. “The company has cut all other expenses and renegotiated with vendors, partners and landlords and after exhausting all other cost-saving measures, we have taken this decision as a last resort,” he added.
Uber India Lays Off 600 Employees
Uber India reportedly laid off 600 employees across driver and rider support, as well as other functions. According to an email sent by Uber CEO Dara Khosrowshahi to employees, the layoffs are part of the company’s already announced global job cuts which were being done in phases across geographies.
Pradeep Parameswaran, President, Uber India and South Asia, said that all impacted employees will receive a minimum of 10 weeks payout, medical insurance coverage for the next six months, outplacement support, be allowed to retain their laptops and given the option to join the Uber talent directory.
CarDekho Lays Off 200 Employees
Jaipur-based CarDekho has laid off around 200 employees and initiated pay cuts across the board. The CarDekho spokesperson confirmed the layoffs saying that the company was “constrained to look at rightsizing and salary cuts in a few businesses given the period of slow recovery and in some cases a permanent change in the pattern of consumer spends.”
The company has reportedly introduced salary-based pay cuts ranging from 12%-22.5% pay cuts across the organisation. The company said it is offering to “cover the impacted employees financially but have also set-up an intermediary support system to guide them towards opportunities inside and outside the organisation.”
Ola Lays Off 1400 Employees
Bengaluru-based cab aggregator Ola has announced that it is laying off 1,400 employees from its workforce. In an email, cofounder and CEO Bhavish Aggarwal told employees that Ola’s revenue had fallen 95% over the past two months. Hence, the company has decided to downsize its operations. The layoffs are being done in the mobility business in India and by the end of next week for Ola Foods and Ola Financial Services.
The impacted employees will be informed by Saturday in one-on-one conversations with the HR team. The company is offering up to three months of fixed salary as severance pay, irrespective of the notice period. Beyond this, those employees who have spent significantly more time will be eligible for higher payouts depending on their tenure.
The company said that this crisis necessitates the need to conserve cash aggressively so that it is able to invest in opportunities in the future. Aggarwal said that the company is increasing its investments and adding people capabilities in R&D across the group through this crisis to double down on innovation and engineering.
ShareChat Lays Off 1/4th Staff
India’s vernacular social networking app, ShareChat has announced layoffs of 101 employees or one-fourth of its workforce due to the Covid-19 pandemic and local market uncertainties. Confirming the layoffs, the company spokesperson told Inc42, “The global pandemic along with various local market uncertainties have had an impact on our business plans. This has pushed us towards certain tough decisions including a revised leaner structure while we continue to grow. We’ve had to let go of 101 of our employees who’ve been part of our start-up journey. This was not an easy decision to make.”
The laid-off employees will have the option of taking a ‘garden leave’ of two months or half the salary for four months. The spokesperson added that the company will provide a comprehensive severance package and extend assistance to the impacted associates with their outplacement support.
WeWork Lets Go Nearly 100 Employees
WeWork has fired close to 100 employees who accounted for 20% of the total workforce in the country while putting a halt on expansion plans. WeWork India CEO Karan Virwani made the announcement through an email stating that there was an immediate need to reduce costs.
In an email seen by CNBC-TV, Virwani said the first priority is to get the maximum value from our buildings and address the immediate need to reduce our costs by running our business as efficiently as possible. “What this also means (for the company) is that, in 2021, we will deliver only the buildings that we have already signed,” Virwani added.
Livspace Lays Off 450+ Employees
Bengaluru-based home design and decor service provider Livspace has laid off 15% of its total workforce i.e over 450 employees out of a total of 2,800. About 15% of the organisation has been impacted due to this decision across central teams and other teams like sales, business development etc.
Talking to Inc42, Livspace cofounder and CEO Anuj Srivastava said that the company is offering a month’s notice and severance pay, along with an assistance package, as part of which every employee will receive a portion of their pay. He added that the company may have to look at salary adjustments if the situation prolongs.
Swiggy Lays Off 1100 Employees
Bengaluru-based foodtech unicorn Swiggy has now announced that it is laying off around 1100 employees spanning across grades and functions in the cities and head office over the next few days. The company will inform the impacted employees over the next few days. For the laid-off employees, the company is offering at least 3 months of salary irrespective of their notice period or tenure.
Further, for every year in Swiggy, the company will be offering an extra month of ex-gratia in addition to their notice period pay, working out to between 3-8 months of salary depending on the tenure.
LendingKart Lays Off 250+ Employees
Fintech startup LendingKart is reportedly laying off over half of its workforce of around 500 employees across its offices in Ahmedabad and Bengaluru with immediate effect. The report added that employees have claimed that no valid reason was given for their sudden termination, and terms of compensation are vague. The cited employee reportedly will receive 2-month severance after sending in voluntary resignation email.
Zomato To Lay Off 13% Of 5000+ Employees
Zomato CEO Deepinder Goyal told employees in an email that the company will have to layoff around 13% of its total workforce i.e. nearly 5000 employees. The laid-off employees will receive half of their salaries along with health insurance, for the next six months or till they find their next job, whichever is earlier.
Further, Goyal also announced temporary pay cuts across the organisation from June. “Lower cuts are being proposed for people with lower salaries, and higher cuts (up to 50%) for people with higher salaries,” Goyal said in an official post. This temporary reduction in pay will also be eligible for 2X employee stock grants.
Shadowfax Lays Off Nearly 50 Employees
Bengaluru-based third-party logistics startup Shadowfax has pulled back on its expansion plans and has directed staff into food delivery space with cloud kitchens. The company was reportedly in talks to raise capital from external investors for the vertical, and scale to tier 2 and 3 cities. It has also laid off close to 50 employees responsible for expansion into smaller cities for its logistics business.
Curefit Lays Off Over 1000 Employees
Mukesh Bansal and Ankit Nagori-led Curefit’s multiple employees told Inc42 that the company has decided to lay off around 1,000 employees, while at the same time, it is pulling back on its Tier 2 presence with shutting down of physical fitness centres. The company is now also looking to monetise the free virtual classes it had introduced in late March in light of the coronavirus lockdown.
Udaan Lays Off Contractual Staff
B2B ecommerce platform Udaan was reported to have laid off 2000-3000 of its contractual staff. The downsizing is largely driven by the Covid-19 pandemic significantly denting the company’s top line across non-essential categories including electronics, and apparel. “With the economy showing no or very weak growth signs for at least the next eight to ten months, operating costs have to be recalibrated,” reports said.
Automation Anywhere Layoffs Employees To Manage Business Demands
Robotic Process Automation firm Automation Anywhere has started laying off its employees due to the pandemic. In a LinkedIn post, now deleted, CEO Mihir Shukla said, “The company will reduce our workforce and realign organisation in order to better meet the business demands.” “After observing the COVID-19 pandemic unfold throughout the world for nearly four months, we have made a difficult decision,” Shukla said. “Though we realize this could not come at a worse time, it is clear that the COVID-19 pandemic will impact our business in more than one way,” he added.
OYO Cuts 25% Salary Companywide
OYO Hotels and Homes has now asked its employees to “accept” 25% salary deduction effective for April-July 2020 payroll as it looks to overcome the impact on revenue from the Covid-19 pandemic. OYO has decided to put some employees on leave with limited benefits from May 4, 2020 to August 2020. The benefits would include medical insurance and parental insurance, school fee reimbursement, and ex gratia support.
Inc42 Exclusive | Limeroad Resorts To Pay Cuts, Ponders Furloughs
Fashion ecommerce platform Limeroad has undergone company-wide pay cuts and resorted to furloughs, Inc42 has learned. Suchi Mukherjee, CEO, Limeroad, confirmed the pay cuts saying founders have taken 100% deduction, while other employees have taken 10%-30% pay cuts. However, she said that the company has just discussed temporary leaves and hasn’t finalised anything yet.
Inc42 Exclusive | Vakilsearch Cuts Jobs And Salaries
Vakilsearch, the online legal platform for tax, startup registrations and compliance, has laid-off some employees from its sales team, Inc42 has learned from sources. Sources said the company has also put in place salary-based pay cuts from 15%-30% across the organisation. The company is yet to confirm the same to us.
Inc42 Exclusive | CleverTap Lays Off Employees To Cut Costs
Mobile marketing platform CleverTap has laid off around 60 employees, Inc42 has learned from sources close to the company. The layoffs have come across teams like design, engineering, marketing, product management etc. The company told employees that it is a cost-cutting measure and has given one-month severance pay. CleverTap spokesperson confirmed this to Inc42 saying that on April 16, 2020, CleverTap reduced employee headcount by 20% worldwide.
The company said it is offering enhanced severance benefits as well as outplacement services to these employees.
Inc42 Exclusive | BulBul Enforces Pay Cuts
Social commerce platform BulBul has laid off 100 of its total 300 employees, Inc42 has learned. The source said that layoffs have been done across teams like inventory management, complaints management etc as the company’s deliveries are off currently. Further, the company has also put in place a 10% salary cut across the organization. Also, founders have taken 100% pay cut while senior management will take 1/3rd of their salary going forward. BulBul CEO Sachin Bhatia confirmed pay cuts to us but denied any layoffs.
Blackbuck Lays Off 200 Employees
Logistics tech unicorn BlackBuck is said to be laying off around 200 employees as the transport sector faces massive disruption due to the lockdown. The impacted departments are customer experience and operations teams. The company is trying to get several of the affected employees placed in other organisations.
Orange Something Shutters Down With Layoffs
Grofers’ has reportedly laid off around 70 employees from its side project of beauty and wellness products, Orange Something, and offline segment for three month months. Albinder Dhindsa, cofounder of Grofers, said that Orange Something had “stopped” operations and about 35 employees from that segment were moved to other functions in the company. Dhindsa claimed that the rest of the employees are on payroll with the reduced salary, but will get health benefits. The company said that Covid-19 outbreak has caused “unprecedented loss of opportunities” and hence the company has opted to place staffers on furlough for three months till mid-July.
Acko: Online insurance firm Acko has reportedly let go of around 50 employees across customer service, operation sales, and marketing teams. Acko founder Varun Dua said 45 people were “impacted”. The leadership team has taken deep voluntary salary cuts between 50% and 70% to do what’s right in the interest of the majority.
Capillary: Talking to Inc42, Capillary employees confirmed that the company has laid off 4-5 employees from each team for business continuity amid the crisis. The employees said that the company has laid off people from its various offices.
CreditMate: CreditMate cofounder and CEO Jonathan Bill said that the company has reduced salaries across the board to save costs. CreditMate has a total of 60 employees and is cutting its salary bill by up to 20%. Cofounder Bill said a 25% is mandatory for employees earning above INR 1 Lakh per month, with those employees not willing to take the pay cut asked to leave.
Droom: Droom CEO Sandeep Aggarwal confirmed the pay cuts for employees saying, “Everyone at Droom has taken a salary cut of 15%, at every level throughout the company, with effect from April 1.”
FabHotels: FabHotels laid off over 100 of its employees as a result of its ‘resource optimization’ exercise across operations, tech, sales and supply acquisition teams. While the founders will take a 25% pay cut, the company has instituted salary-based pay cuts ranging from 15%-20%.
Fareportal: Employees of US-based Fareportal in Gurugram were asked to resign recently. An employee told Inc42 that Fareportal sacked around 300 employees due to the “devastating effect” the coronavirus pandemic had on the tourism industry. The company has told them the employees will receive March’s salary along with 15 days basic salary in the FNF.
IndiaLends: IndiaLends has asked some employees to opt for leave without pay and others to take steep pay cuts as it looks to navigate the current economic crisis caused by the pandemic and the lockdown.
Instamojo: Instamojo cofounder and CEO Sampad Swain said that the company has downsized 6%-7% of its total workforce of 100 employees. “Pay cuts were implemented because the business was impacted due to COVID-19,” Swain added. Instamojo has implemented 10-40% company-wide pay cuts, of which the top management has taken the highest 40% cut.
Ixigo: At ixigo, founders have foregone their salary while employees have taken salary cuts to help the company overcome the loss in revenue to a certain degree and extend the runway till conditions improve for the travel sector.
Livspace: Livspace’s founder and CEO Anuj Srivastava said that as of now, there have been no COVID-related layoffs or salary reductions at Livspace. However, cofounders, Anuj Srivastava and Ramakant Sharma will forgo 70% of their entire year’s salary.
MakeMyTrip: MakeMyTrip began by reducing costs on the employees front and to set an example both founder Deep Kalra and group CEO Rajesh Magow have pledged to not take a salary effective April 2020. Rest of the leadership team at MMT have also offered to take approximately 50% in compensation.
Meesho: Meesho has laid off around 200 employees. About 40% of the company’s key account managers, all business relationship managers and about 30-40% of the business development team have been laid off.
OYO: OYO has asked thousands of employees to go on leave or furloughs for a period of up to three months as the company plans to dodge coronavirus’ impact on the revenue and occupancy of its hotel rooms. Further, founder and group CEO Ritesh Agarwal has foregone his salary for the year. The company’s executive leadership team has taken a voluntary pay cut starting at 25% to 50% from April 2020.
RateGain: B2B SaaS platform RateGain has sent hundreds of employees on temporary leave while several others have been asked to take pay cuts. The company said it has implemented salary reduction with the management team taking the greatest hit between 50%-100%. Further, the company says it sent some of its employees on furlough with an action plan to bring them back as soon as possible.
Shop101: Shop101 has asked nearly 40% of its total employees to resign while others have been asked to take pay cuts. The company had informed its employees on April 3 via a group call. A source within Shop101 said that out of total 400-500 employees, nearly 200 employees across teams have been asked to leave. The company also terminated nearly 100 contractual employees, who were involved in call centre operations.
Shuttl: Shuttl employees also told us that the company has laid off employees across teams, one of the being on-ground operations teams. The company had directed employees to resign, and those who didn’t have been terminated. Shuttl has claimed that it has laid off 40 employees.
TravelTriangle: TravelTriangle has reportedly announced layoffs of about 50% of its employees from operations, marketing, customer support and business development teams.
Treebo Hotels: Treebo Hotels offered a voluntary resignation option to 400 of its employees. Treebo CEO Sidharth Gupta told Inc42 that nearly 120 employees have taken up the scheme. Gupta added that the founders are taking a 60% salary cut and senior management is taking 40% salary cuts for at least three months.
Turtlemint: Online insurance marketplace Turtlemint has announced company-wide pay cuts ranging from 10%-30%.