Scooter rental startup Bounce has laid off around 20% of its 600-strong workforce this week in a bid to cut costs and preserve capital, according to four people aware of the development. Most of these people were from mid and senior-level with high pay packages, added the people cited above.
This comes at a time when businesses have been hit hard due to the ongoing Covid-19 pandemic, prompting startups to work towards saving resources and expand their runway.
The Bengaluru-based company has let go of around 120 employees primarily from an internal project called ‘New Initiatives’ and customer support. Of these, 100 are senior to mid-level employees. All of them have been asked to leave with three months severance. A major portion of these employees were looking after experiments including bike taxi, car-pooling and kirana stores initiative
“Bounce was internally working on carpooling and bike taxi services,” said one of the sources cited above, requesting anonymity. “With this layoff, the company is likely to put a brake on such experiments.”
Under the ‘kirana stores’ initiative, the company was partnering with small retailers to use their locations as designated pick-up and drop points.
“It’s not clear whether Bounce will scrap this completely or not,” added the second person cited above, requesting anonymity.
Bounce CEO Vivekananda Hallekere, however, denied any such development.
“We have let go of about four people in product and tech and about 20- 30 over the last few days in customer care,” he said. “New initiatives team is handled by the CEO’s office and is intact. We work with contract folks and we let go of those contract engineers as and when the project is done. We usually replace them with internal folks.”
The company also confirmed that it has given insurance cover to impacted employees and helping them with outplacement.
It’s worth noting that Bounce has been cutting costs since early January. To ramp up revenue and bring accountability amongst users, it had increased security deposit by 3X and charged a higher cost per kilometer travelled from users. The company has brought down monthly burn in the range of $5 million from $7 million.
The company, founded by Hallekere, Varun Agni and Anil G, raised $105 million in January from a clutch of investors including Accel and B Capital. The bike-sharing company has grown fairly quickly over the last one year and has also managed to have a strong cap table with a clutch of marquee investors on it.
It has also hired aggressively as it was looking to grow fast and achieve scale. Bounce is also known to be one of the startups in the country that pays high packages to senior level employees to attract the best talent from other more established startups.
Bounce competes with another scooter-sharing startup Vogo, which has been funded by the likes of Ola and Stellaris Venture Partners, among others. Vogo had also laid off about 15% of its workforce across hardware and product teams.
Update: We have updated the story to carry the company’s comments that include 3 months severance given to laid-off employees, insurance and help in outplacement.
