Rivigo's rejig results in 70-80 employees getting fired, placement offers withdrawn

Transportation and logistics startup Rivigo has reportedly laid off employees and there have also been several complaints raised by people from colleges around rollback of offer letters extended to them during college placements.

As per media reports, the number of fired employees lies in the range of 70-80 people whereas people from prestigious colleges like IIT, IIM, NIIT, and ISB have faced withdrawal of offer letters by the company.

Entrackr had got similar information a month ago and we had a conversation with Gazal Kalra, the Marketing and Logistics Human at Rivigo, around the same.

At that time, Kalra had explained in detail how the company had arrived at this attrition. She elaborated that every year since 2014 Rivigo had launched a new product - full truckload, cold chain, part truckload, freight marketplace, digital services on the freight marketplace, and relay - in that order.

“For developing each of these businesses there was a build (tech) team and an operations team in place, but with the maturity of the initial three businesses, the role of build team reduced and operations team enhanced,” said Kalra talking about one of the factors resulting to lay offs.

Another factor was a consolidation of two businesses - the freight marketplace and full truckload, along with the sales team. Due to this consolidation, the firm had to see off several employees whose job descriptions overlapped and created inefficiency in the firm's operations.

Lastly, she mentioned how the micro economy had seen a dip this year, which had created a high-pressure environment for the business making efficiency and profitability key to sustaining the business in the long run. 

“The business has been facing a slowdown for the last 6-8 months, and this slowdown would continue for the next 6-8 months. Hiring and firing are part and parcel of a business and in times as such, it only makes sense to be bullish on unit economics,” Kalra told Entrackr.

Commenting on the withdrawal of offer letters, Kalra told ET, that most of these students had been outplaced. While Kalra’s comment on this is nonchalant in the least, the impact of this move on these students’ life is drastic.

A student complaining about the same over LinkedIn specifies how, he had been offered a position by Rivigo during their college placement drive, and due to accepting that offer he could not sit for any other job, and now the offer has been withdrawn and he has no certainty about post-college employment anymore.

For whatever reasons, this is highly unprofessional and irresponsible behaviour on Rivigo’s part.

ET’s sources entailed that the company had been under pressure from the investors to bring down their costs, improve unit economics across businesses, and switch to an asset-light model.

These firings, according to the report, comes after the inability of the company to charge premiums on the relay business and lack in the asset-light freight model.

The company that works with 10,000 truck pilots, 580 business partners, and 4,900 employees raised $35 million in the month of February, where the second tranche worth $65 million of this Series E round came last week; taking the total up to $100 million.

When Entrackr had interviewed Kalra, last month she had mentioned how the total round was worth $75 million, out of which $40-45 million arrived in June this year.

However, even with this business the dip in economy and truck pilots in the industry, Rivigo admitted to facing problems for the year and only hoped to sustain by focussing on bringing inefficiency in the business model till there is scope for the business to pick up again.

In this efficiency drive, Rivigo claims to have double the gross margins in the relay, full truckload, and part truckload business and operating profit have arrived at a break-even.