Meesho Enters The List Of Firing Spree.

Softbank-backed e-commerce juggernaut Meesho has announced its second wave of layoffs in less than 1 year, resulting in the dismissal of 251 employees, or around 15% of its staff.

Vidit Aatrey, co-founder and CEO, told the company’s workforce of the decision in an email dated May 5, citing a challenging macroeconomic situation.

The Bengaluru-based company, which was among the first few new-age enterprises to eliminate positions in a challenging funding climate, let go of 250 people last year from its grocery component, which was renamed from Farmiso to Superstore. The most recent round yet is the first at Meesho’s marketplace model, which is its primary business.

Aatrey voiced that as leaders, they committed mistakes by over-hiring ahead of the curve. At the same time, they could have operated the organisational system more efficiently and effectively.

Meesho spans and layers were exaggerated, which may have had unforeseen effects on the company’s implementation pace. While the company is sure that the Meesho business will continue to thrive, economic reality is here to stay. They are now confronted with the challenging task of matching their personnel expenditures with the new business estimates. Aatrey remarked that they should have done better here.

Employees affected by the latest decision will get an email in the following 60 minutes informing them of their employment status with the organisation. According to the email, meeting links would then be provided privately to promote one-on-one talks between staff members and their bosses. Outgoing employees, on the other side, will have access to Gmail and Slack channels until the end of the week.

Meesho made the painful choice to part ways with 251 Meeshoites, accounting for 15% of the employment base, as Meesho seeks to operate with a reduced organisational system to ensure long-term profitability, a Meesho spokeswoman said.

The company is committed to providing full support to all those affected and will provide a separation package which includes a one-time severance payment ranging from 2.5 to 9 months (depending on tenor & designation), continued insurance benefits, job post assistance, and accelerated vesting of ESOPs. Aatrey stated that the firm is appreciative of their contributions to the construction of Meesho.

According to the email, departed staff will get total compensation for their notice period and an additional one month, as well as a tenure-based payout of 15 days’ salary for each and every completed year of service, rounded up to the nearest year. The business also stated that it will extend family insurance coverage until March 31, 2024. In addition, ESOP vesting standards would be relaxed so that leaving workers remain shareholders in the firm.

Along with the reduction in manpower, Meesho has cut its cloud expenditures by half. In fact, Meesho’s monthly cash burn was reduced by 90% to about $4 million in December last year, according to the company’s Chief Financial Officer, Dhiresh Bansal.

According to Jefferies analysts who spoke with management, Meesho is reaching 0 cash burn and aiming for EBITDA breakeven in CY23, with a cash cushion of roughly $400 mn.

Aatrey recently stated in an email that, while the company’s financial reserves will ease them for these difficult times, they must remain highly cost-conscious.

Meesho has raised over $1 billion to far and is valued at $4.9 billion. According to Jefferies critics, Meesho is India’s biggest e-commerce platform, with a GMV of around $4.5 billion and a 7% market share in a sector dominated by Walmart’s Flipkart and Amazon. Meesho, on the other hand, is outpacing the market.

Conclusion.

Every week, thousands of people are laid off throughout the world. As a result, the remaining employees may feel overworked, anxious, and unappreciated, resulting in lower morale, motivation, and productivity. Changes brought about by significant layoffs can also upset business culture, leading employees to doubt their employment security and the company’s future. Let’s wait and see what occurs next.

Proofread & Published By, Naveenika Chauhan