Online payments processor and aggregator Cashfree has joined the list of many growth stage startups that have laid off part of their workforce. The Bengaluru-based firm has let go of up to 100 employees in a restructuring exercise, according to three sources aware of the development.
“Anywhere between 80-100 employees have been asked to go in the past few weeks,” said one of the sources who requested anonymity. “A major chunk of the impacted staff is from marketing and operations.”
This appears to be the first layoff exercise by the SBI-backed firm in the past few years. According to sources, the move could be seen as a cost cutting measure as the Indian startup ecosystem is set for a long funding winter. ET was the first to report this development.
Over the past six to eight months, many startups irrespective of their size, stage and (unicorn) status have trimmed their workforce significantly in a bid to conserve cash and extend their runway. This long list includes Byju’s, Unacademy, Eruditus, LEAD, Swiggy, Ola, Dailyhunt, Udaan, Chargebee, Cars24, Meesho, and Vedantu.
“Cashfree Payments has been periodically evaluating performances and processes as a standard business practice. The organisation has reevaluated the relevance of certain roles and functions leading to movement of talent within teams and a few employee exits. This process of organisational restructuring has impacted around 6-8 percent of employees,” the company said in a statement.
The firm did not comment on any specific number of the people who were let go.
Cashfree is one of the first few companies to get in-principle approval from the apex banking body (RBI) for a payment aggregator (PA) license. However, the company along with Razorpay were asked by the Reserve Bank of India to stop on-boarding new merchants until they receive their final payment aggregator license.
Data compiled by Fintrackr shows that more than 20,000 startup employees were fired in 2022. The layoff season has been majorly driven due to a tough funding environment; a clutch of them also cited layoffs as part of their annual performance assessment processes.
The current year doesn’t seem any better with more than half a dozen companies reducing headcount, including UpScalio, Bounce, Moglix, Harappa, Uniphore, LEAD, and Unacademy’s Relevel.
As for Cashfree, while it is yet to disclose its FY22 financial numbers, the company was profitable in FY21 with Rs 227 crore revenue which grew 2.3X over FY20.