After a series of Unicorns and startups that laid off thousands of employees collectively in the past three months, used car content and commerce platform CarDekho has let go of over 200 employees. “The number of laid-off staff could be more and it’s evident as it has about 5,000 employees including third-parties,” according to two sources familiar with the development.
The automobile sector has been impacted heavily due to no business from the past two months with hazy clarity for the next 6-8 months. “Other players in the segment have also cut jobs and underwent pay cut exercise. If things don’t improve, more layoffs and further pay cuts aren’t too far,” said one of the two people mentioned above.
Apart from letting go of such a number of staff, CarDekho also took pay cuts across levels. According to an email sent by the company to its employees, staff with a salary between Rs 2.5 lakh to 5 lakh have to bear 12% pay cut and those who earn between Rs 5 lakh to 15 lakh will get 15% deducted salary effective from May to July.
Entrackr has reviewed a copy of the email.
The salary cut scheme goes up to 20% for those who earn between Rs 15 lakh to 40 lakh whereas Rs 40 lakh and above earning employees will receive 22.5% deducted salary.
The firm has given an exemption to low-income groups with an annual salary below Rs 2.5 lakh while senior management level will bear the highest pay cut of 45%, it mentions. Layoffs related to third parties couldn’t be ascertained by Entrackr.
Email sent to CarDekho on Saturday did not elicit any response. We’ll update the post as and when the company responds.
“The role of the digital channels in the automobile segment would grow but recovery time would be slow,” said the second person who has been a key leader at an online used-car marketplace. He requested anonymity as well.
“Although the business has started to recover, the ongoing crisis will also test other notable players such as Cars24, Spinny, Droom and Cartrade,” he added.
Backed by the likes of Sequoia Capital, Hillhouse, Ping An and Lenarco Limited, CarDekho was valued at around $643 million during its $70 million Series D round.
Besides dealing in new and used cars, it also forayed into the insurance broking space with auto vertical in June 2019.
During FY19, CarDekho had improved its financials and its revenue recorded a 62% growth to Rs 260 crore and it also claimed that the new car segment was EBITDA positive.