Udaan, a business-to-business unicorn, is laying off up to 350 people in its second wave of layoffs since June, in order to enhance efficiency and profitability. A person close to the situation informed VCCircle that the layoff will affect about 10% of the company’s 3000 permanent employees.
Previously, in June, the corporation sacked 180 executives as part of its cost-cutting strategy. With this, Udaan joins a long list of firms that have had to lay off workers in order to focus on profitability in the face of a funding slowdown.
According to The Morning Context, the amount is believed to reach up to 30% of its employment or approximately 1,000 workers. However, according to the person quoted above, while 300-350 of those sacked were on the business payroll, the others are most likely on contract.
“As we progress toward making Udaan a profitable firm, the efficiency enhancement drive and the development in the business model have produced certain redundancies in the system, with some functions no longer required,” Udaan said in a statement.
“We are working to provide all necessary support to the impacted staff,” added the statement. However, the corporation did not provide information on the severance packages granted to existing employees.
Aditya Pande, Udaan’s chief financial officer, informed staff last week in an internal email that the company had raised $120 million (about 960 crores) in convertible notes and debt, with current owners and bondholders leading the way. The investment brought Udaan’s total cash raised in the last four quarters through convertible notes and loans to more than $350 million.
The company has raised about $1.5 billion in equity and debt thus far. The business also plans to go public in the next 12-18 months.
“We believe that efficiency is a key driver of profitable growth and will continue to improve our cost structures and models.” “We have taken various initiatives in this regard, including expanded digital capabilities, to gain efficiency and scalability, become more nimble, and remain competitive in the marketplace,” Udaan said.
Former Flipkart employees Amod Malviya, Sujeet Kumar, and Vaibhav Gupta co-founded Udaan in 2016, allowing them to locate clients, suppliers, and products across categories and interact with one another directly for the best price.
Udaan raised $250 million earlier in January, with $200 million in convertible notes or short-term debt that can later be converted to stock and $50 million in loans.
In April of this year, Microsoft Corporation joined the company’s fundraising in a $225 million round, and it is also backed by investors such as Octahedron Capital, Moonstone Capital, Lightspeed Venture Partners, DST Global, GGV Capital, Altimeter Capital, and Tencent, among others.
Udaan has over 3 million registered users and 25,000-30,000 sellers across 900 cities in the country, covering more than 12,000 PIN codes, and the platform has over 1.7 million retailers, chemists, kirana shops, HoReCa, farmers, and others doing over 4.5 million transactions per month, making it a leader in the b2b eCommerce business.
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