E-Commerce Unicorn Meesho Terminates 251 Employees
India’s one of the most popular & successful e-commerce startup & unicorn Meesho has laid off 15% of its workforce to reduce company’s costs.
Indian e-commerce unicorn Meesho has laid off 251 employees or 15% of its workforce due to over-hiring, as it looks to work with a leaner organizational structure to achieve sustained profitability.
The company is working towards reducing costs and becoming EBITDA-positive by mid-2023 before going public.
Meesho, which is backed by SoftBank, has laid off 251 employees or 15% of its workforce in its latest round of layoffs. The decision was made due to “over-hiring,” according to a company email sent by CEO Vidit Aatrey.
Meesho CEO noted that the company’s spans and layers were inflated, leading to unintended consequences on its speed to execute. Aatrey expressed regret for the layoffs, saying that the company should have done better.
The affected employees will receive their full salary for their notice period and an additional month, along with other compensation, including family insurance coverage extended until March 31, 2024, and relaxed employee stock ownership plan (ESOP) terms.
This is the second round of layoffs for Meesho in a year, following the termination of 250 employees from its grocery arm Superstore in the previous round.
Meesho had also shut down its grocery business Farmiso and integrated it into its core app, leading to the laying off of nearly 300 employees.
The company is working towards reducing costs, with the aim of becoming EBITDA-positive by mid-2023 before going public. Meesho claims to have reduced its cash burn by 90% between January and December 2022.
However, the company has yet to disclose its FY23 numbers, and its losses increased 7.5-fold to INR 3,247 crore ($435 million) in FY22, despite a 4.5-fold surge in revenue to INR 3,232 crore ($432 million) during the same period.