Layoffs at new-age startups are becoming more and more common during the coronavirus pandemic. As company’s struggle to keep business floating during this unprecedented crisis, layoffs have become a common tool to conserve cash.
Joining the likes of many others, used car marketplace CarDekho has recently laid off over 200 employees. According to an Entrackr report, the number of laid-off staff could be more. The company currently has around 5,000 employees including third-parties.
Apart from letting go of such a number of staff, the company has also given salary cuts to employees across levels. As per an internal communication to its employees, the company notified that staff with a salary between Rs 2.5 lakh to 5 lakh have to bear 12% pay cut and those who earn between Rs 5 lakh to 15 lakh will get 15% deducted salary effective from May to July.
As per the Entrackr report, the salary cut scheme goes up to 20% for those who earn between Rs 15 lakh to 40 lakh whereas Rs 40 lakh and above earning employees will receive 22.5% deducted salary. Company’s senior management will bear the highest pay cut of 45%.
However, the firm has given an exemption to low-income groups with an annual salary below Rs 2.5 lakh it mentions. There is also no update on whether the layoffs are also made from the third party employee pool.
Backed by the likes of Sequoia Capital, Hillhouse, Ping An and Lenarco Limited, CarDekho was valued at around $643 million during its $70 million Series D round. Besides dealing in new and used cars, it also forayed into the insurance broking space with auto vertical in June 2019.
The automobile industry had long been in a soup even before the pandemic. But the coronavirus outbreak and subsequent lockdowns have put nails in the coffin. Automobile manufacturers for the first time have registered zero sales of their products due to the lockdown. If things continue to be the same, the industry will have to resort to even tough measures liking filing for bankruptcy.
