Social commerce startup Meesho has laid off more than 200 employees of its over 700-strong workforce, according to three people familiar with the matter.
The idea is to cut costs at a time when they have seen a sharp decline in their business due to the Covid-19 pandemic.
“They have fired a lot of key account managers who are responsible for onboarding vendors,” said one of the people cited above, requesting anonymity. “Since Meesho wants to control the speed of signing up of vendors, they will instead convert the fixed cost of salaries to variable by outsourcing the vendor acquisition.”
Meesho, which has around 150 key account managers, is laying off employees in other departments, too, including customer support, operations and marketing, added the people mentioned above.
Apart from that, the company is still mulling over slashing salaries of employees, but sources say that executive and senior-level employees may eventually have to take a significant pay cut.
“It may be announced later this month,” said the second source, who did not wish to be named. “The decision to layoff was taken after taking advice from the investors over the past two weeks.”
As India continues to be in a 21-day lockdown due to the novel coronavirus pandemic, sale of non-essential items (both online and offline) have taken a huge hit leading to almost no business for such platforms. Social commerce firms such as Meesho along with e-commerce platforms such as Amazon and Flipkart have been a direct victim of this situation.
In fact, Meesho recently launched grocery offerings to support their reseller network because their core business has been at a standstill due to the lockdown. Entrackr had exclusively reported the development last month.
Entrackr queries sent to Meesho co-founder and CEO Vidit Aatrey didn’t elicit any immediate response. We will update the post as and when he responds.
Founded by Aatrey and Sanjeev Barnwal over four years ago, Meesho has been a leader in the Indian social commerce space. It last raised $100 million from Naspers in August. Facebook also put in $25 million in the round.
Meesho isn’t the only well-funded company to have let go of employees and cut salaries. Accel-backed scooter rental app Bounce had laid off about 120 employees and slashed salaries across the organization while Binny Bansal-funded Acko fired around 50 employees. MakeMyTrip, Ixigo and many other companies also chose to slash salaries in order to keep their companies afloat.