7000 workers are hired by these companies: Ola, Swiggy, Uber, CureFit, Zomato, Oyo & More
According to a survey conducted by Nasscom, 70% of startups have less than 3 months of cash runway. The industry body’s month-long e-survey, which was conducted to study the impact of the COVID-19 pandemic on Indian startups, found that around 40% of startups have either temporarily shut down operations or are on the verge of shutting down.
Indian Startups In A Ditch!
From foodtech and cab aggregators to hospitality and travel – many startups have been enduring countless challenges to sustain their business in terms of cash liquidity, getting funds from investors, etc. The last few months have seen a substantial drop in the investments, hence the startups have been struggling with their residual cash flow.
As a result, several startup employees have been handed pink slips, while others have been asked to go on temporary leave or furloughs. The founders and CEOs are also foregoing their salaries as businesses try to make up for the revenue shortfall.
Lets see how the startups are tiding the COVID-19 crisis…
Last month, In an email to employees the foodtech unicorn Swiggy’s Co-founder and CEO, Sriharsha Majety, announced the company will be downsizing and resorting to cost-cutting. Sriharsha said: “Today is one of the saddest days for Swiggy as we have to go through an unfortunate downsizing exercise. With a heavy heart, I have tried to share the reasons and details of the process below, because you deserve to know. In line with the above business decisions, we, unfortunately, have to part ways with 1,100 of our employees, spanning across grades and functions in the cities and head office over the next few days.”
The mail said all impacted employees will receive at least 3 months of salary, irrespective of their notice period or tenure. Swiggy is also working on a healthcare plan. The food tech startup said it will provide medical insurance cover for employees who have lost jobs and their families till December 31, 2020, and will also provide insurance cover for their parents till December 31, 2020. It is also working to ensure a smooth career transition and providing necessary career support for the next 3 months for the impacted employees.
Another food delivery unicorn, Zomato has announced a 13% reduction of its workforce along with pay cuts as coronavirus reduced the number of food deliveries substantially.
In a note to his employees, Zomato Founder and CEO Deepinder Goyal said, “Multiple aspects of our business have changed dramatically over the last couple of months and many of these changes are expected to be permanent. While we continue to build a more focussed Zomato, we do not foresee having enough work for all our employees.”
According to Goyal, the lockdown has severely affected the business, with a large number of restaurants shutting down permanently, and he expects this to shrink further by another 25-40% in the next 6 to 12 months. However, he said the affected employees will continue to receive support from the company in terms of financial, outplacement support, healthcare, and equity. The company also said employees who have lost their jobs will continue to receive a 50% salary for the next 6 months.
Ride-hailing unicorn, Ola’s revenue fell by nearly 95% over the last two months, the company said, prompting it to look for ways to conserve cash aggressively. The company was allowed to resume its services in 160 cities in mid-May.
The cab aggregator, Ola said in May that it will lay off 1,400 employees due to the worsening situation, even after its senior management had already taken significant salary cuts to avoid such a situation.The company did not specify which positions or departments would witness job cuts, but said it would be the last time any COVID-19-related job cuts would be made.
In an email to the employees, Bhavish Aggarwal, Co-founder and CEO of Ola said: “Ever since my last email to you six weeks ago, I had hoped to write again soon in better times. Unfortunately, the COVID-19 crisis continues to unfold all around us, causing unprecedented economic and social destruction. It has also become evident that the coronavirus crisis will not be eliminated any time soon. We will rather have to learn to live with the virus and resultant implications.”
Similarly, the cab aggregator Uber laid off 3,700 of its workforce via a Zoom call in mid-May. The ride-hailing unicorn announced its 2nd round of layoffs in 2 weeks, cutting 3,000 more jobs.
CEO Dara Khosrowshahi in a note to employees said, “Uber will be re-focussing on its core business, moving people and delivering food and groceries.”
He also said that Uber will be closing or consolidating 45 offices globally, and almost all departments will be affected by layoffs. The company is closing its incubator and AI labs, and will pursue strategic alternatives for its job recruiting app.