Inc42 Daily Brief
Stay Ahead With Daily News & Analysis on India’s Tech & Startup Economy
Askmebazaar, a Gurgaon based home and lifestyle products etailer has reportedly fired over 250 employees. The step came in lieu of company’s strategy to increase automation and thereby the productivity, as told by a company’s spokesperson.
Another report by Business Standard, stated that over 650 employees from over 40 offices have left Askme. These were the one’s having salary bracket between INR 2.5 lakh- INR 6 lakh.
According to people close to the development, the company has been running out of funds and employee annual appraisals were delayed this year.
Getit Infomedia (AskMe’s parent company) has promised a month’s salary to these employees. And few of them were told that they might get another job within the group or outside.
A part of the Getit Infoservices group (Getit was initially a print-based classifieds company when launched in 1986), Askme.com was launched as a classifieds portal in 2010. In 2012, Askme came out with Askmebazaar as an online shopping portal focusing on small and medium enterprises (SMEs). Later in 2013, Getit had acquired AskMe from Network18 in 2013.
The portal now operates with over 120,000 merchants, in over 70 cities, including metros and tier II cities as well.
Malaysia-based Astro Holdings is one of the principal investors in the Getit along with Helion Venture Partners. Astro has invested over INR 150 Cr. The company has been in look for funds since long. As per employees, both the investors i.e. Astro and Helion are no longer interested in funding the company.
Recently, the company was also rumoured to be in talks with China’s Alibaba Group Holding and Baidu to raise investments to the tune of $200 Mn.
Its another vertical, i.e AskMe grocery has a operation in over 38 cities with 23 centres in Mumbai. It competes with PepperTap and Grofers. Earlier this month, Gurgaon-based PepperTap shut down its grocery delivery operations. Grofers, backed by SoftBank, Sequoia and Tiger Global, too announced that it was pulling out of nearly nine markets.
Askme had acquired online grocery marketplace, BestAtLowest.com to expand its marketplace services in May last year for over $10 Mn. Later in August, Askme had invested $20 Mn in Bangalore-based online furniture marketplace Mebelkart for a 75% stake. Recently, Mumbai-based online furniture store Housefull International has sent a legal notice to MebelKart for allegedly selling defaulting on payments and selling imitations.
Askme had roped in actor Farhan Akhtar as the new brand ambassador to endorse the company’s products and services through advertising campaigns, which will run across TV, print and online channels rolling out from August 2015.
Taking about lay offs, last year in October, LocalBanya started with Layoffs and suspended operations temporarily. The services are still not resumed. TinyOwl gobbled down INR 2.5 crore a month on an average, and was only left with INR 18 crore at the end of January.
This was the result of excessive overheating that leads to 300 layoffs, thereby placing portal on verge of shutting down. Housing.com is another startup that made big headlines for mass firing. Recently, GirnarSoft and Hiree were also in news for laying off employees.
Update 1: 11 AM, 2nd May
According to a story filed by Medianama, the AskMe Group* has moved around 300 employees to its partner organisations. Company’s group head for marketing and communication for India and Malaysia Manav Sethi stated, “There are no layoffs, at the end of every year we take a hard look at the functions, skills and capabilities that we don’t need to keep on our payroll. We’ve done that exercise and moved those skills, capabilities and functions from our payroll to our partners. We had a big copywriting team, creative team, which is all commodity function. So we moved them to our partners whose cost structures are much lower than ours.”
Note: We at Inc42 take our ethics very seriously. More information about it can be found here.