The company has employee strength of around 4,000. The lay off comes in a move of efficiency enhancement exercise, Economic Times has reported citing company spokesperson.
“As the market evolves, we continue to tweak our already proven business model to make it stronger, more efficient, customer-centric and agile. In this direction, we have various steps to enhance efficiency, refine our cost structure and grow faster in our journey to achieve strong unit economics,” the company said in a statement.
The “efficiency enhancement exercise” has resulted in certain redundancies, with some roles no longer required, it added.
The layoffs comes at the time when company had said that it plans to float an IPO within 18-24 months.
Also Read: Why only 10% of unicorn jobs are in the formal sector
In April 2020, Udaan reportedly laid off Numerous contract workers in a bid to save capital anticipating a blip in demand, after the central government had announced a lockdown to curb the spread of the contagious Covid-19 (Udaan lays off over 2,000 contractual employees as covid-19 hits supply chains). However, penetration of e-commerce in India accelerated in 2020 after local and state authorities put restrictions on businesses and movements of people, forcing millions to switch to online shopping.
Earlier in February this year, the company had decided to remove the one-year cliff on employee stock option plans (ESOPs) that mandated people to wait for a year before vesting their stocks and allow all future ESOP allocations to vest every quarter. Udaan added that every employee will be allotted ESOPs under their annual performance cycle regardless of their tenure or job profile. These ESOPs will vest quarterly and will be completely vested within a two-year period – twice as fast as the industry norm of four years, it had noted.
The company had turned unicorn in 2018 when it raised $225 million as a part of its Series C funding round from DST Global and Lightspeed Venture Partners. The Bengaluru-based company recently raised a round of $250 million (around ₹1,875 crore) via convertible note and debt, regulatory filings showed.
Prior to that, the company in January last year raised $280 million from US-based technology investment firm Octahedron Capital and Moonstone Capital, who joined as new investors, along with existing investors Lightspeed Venture Partners, DST Global, GGV Capital, Altimeter Capital, and Tencent, who also participated in the funding round.
Udaan was founded in 2016 by former Flipkart employees Amod Malviya, Sujeet Kumar and Vaibhav Gupta. It links traders, wholesalers, retailers and manufacturers on a single platform, and enables them to discover customers, suppliers and products across categories. The platform also helps traders to connect directly with each other for the best deal.
Meanwhile, this is not the first time Startups are laying off their employees. In recent months, multiple startups across sectors have laid off employees in a bid to conserve capital. earlier,
Vedantu had laid off 424 of its employees, with other startups also announcing retrenchment plans. Unacademy, operated by Sorting Hat Technologies Pvt. Ltd, had laid off nearly 800 employees.
Earlier this year, edtech startup Lido learned asked over 1,200 of its employees to resign, saying that it was looking to wind down its operations amid a funding crunch. Social commerce startup Meesho laid off 150 employees in May. In February, OkCredit, which is backed by marquee investors including Tiger Global and Lightspeed, laid off around 40 employees.
So far in 2022, 7,000-8,000 startup employees, primarily junior and mid-management staff lost their jobs across verticals such as administration, teaching, sales and marketing, and support staff.
Mint reported on 16 May that startups may lay off another 5,000 employees over the next few quarters due to the rising pressure from investors to improve profitability and to increase focus on their core businesses.
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