Bizongo, a B2B marketplace for providing packaging solutions to medium and large companies, has let go of around 140 employees to cut costs and conserve capital.
Confirming the development to Entrackr, Bizongo’s CEO Aniket Deb said, “Bizongo, unfortunately, had to undertake a workforce rationalization exercise forced by the raging COVID-19 pandemic and its after-effects resulting in a slowing economy. We tried to avoid this step for as long as we could, but we had to implement the restructuring process due to the disruption to the economy.”
While sources said that Bizongo had fired around 140 employees in June, the company did not disclose the number of employees impacted by the company’s latest restructuring.
According to Deb, the company first cut costs across all the non-essential overheads such as marketing, software, and other fixed costs. Meanwhile, it disbursed the variable component of the salaries due to the employees in the month of April besides providing severance packages for all the impacted employees as per contract and continuation of the health insurance until the next renewal.
The sources also said that Bizongo had bought medical equipment inventory worth Rs 25 crore which became slow-moving and cash got stuck. The inventory value has reduced by 70% of its value due to market conditions. When asked over email for clarification on this purchase, the company did not offer any response.
Backed by the likes of B Capital, Accel, Chiratae Ventures and IFC, Bizongo has been able to raise funds at regular intervals — seed round in 2015, $3 million Series A round in 2016, $22 million Series B round in 2018 and $30 million Series C round in January 2020.
The four-year-old startup designs, develops and procures packaging solutions for e-commerce, logistics, and FMCG, and caters to more than 350 clients and is associated with over 750 manufacturing partners across sectors.
Bizongo had around 250-300 employees and laying off almost half of the workforce will be seen as a necessary step by the Mumbai-based company to tide over this difficult period for most businesses.