Social commerce startup Meesho has reportedly laid off more than 200 employees of its 700-strong workforce.
According to a recent report by the news website Entrackr, in an attempt to conserve cash during the pandemic, the startup has laid off over 200 employees just days after entering into the grocery delivery business.
According to the sources cited in the report, the company has handed over pink slips to a lot of key account managers who are responsible for onboarding vendors.
“Since Meesho wants to control the speed of signing up of vendors, they will instead convert the fixed cost of salaries to a variable by outsourcing the vendor acquisition,” said sources in the report.
Meesho, which has around 150 key account managers, is laying off employees in other departments, too, including customer support, operations and marketing, added the people mentioned above.
The company is reportedly also planning to slash salaries to prevent cash burn, especially of the senior management team,
“It may be announced later this month,” said the second source, who did not wish to be named. “The decision to layoff was taken after taking advice from the investors over the past two weeks.”
Meesho had recently launched grocery offerings to support its reseller network because its core business has been at a standstill due to the lockdown.
Founded by Aatrey and Sanjeev Barnwal over four years ago, Meesho has been a leader in the Indian social commerce space. It last raised $100 million from Naspers in August. Facebook also put in $25 million in the round.
Lay off during this pandemic was expected in the talent ecosystem as several countries worldwide have entered a lockdown stage where people are repeatedly being asked to not step out of their houses in an attempt to prevent community transmission of the virus. Businesses are forced to close operations and assist authorities in containing the virus.
Due to these lockdowns, new-age startups and small businesses are having to resort to tough measures like furloughing employees or laying them off. According to a report by the International Labour Organization, it is being estimated that the pandemic will lead to a joblessness crisis worldwide. The UN agency estimated that more than 2.5mn people will lose their jobs and the pandemic will have a wider impact on the economy.
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