SoftBank-backed Meesho has fired 251 employees, which is nearly 15% of its workforce, as part of its efforts to achieve profitability, the company told its employees in a town hall meeting on May 5.
This is the second layoff for the Bengaluru-based startup within a year. In August 2022, the firm shut down its grocery business Farmiso and integrated it into the core app of Meesho. In this process, nearly 300 employees were laid off as per media reports.
On the latest layoffs, Meesho co-founder and CEO Vidit Aatrey told employees that the company made ‘judgment errors’ in over-hiring ahead of the curve.
“We have taken a difficult decision to part ways with 251 Meeshoites constituting 15% of the employee base, as we look to work with a leaner organizational structure to achieve sustained profitability,” said a Meesho spokesperson in a statement.
According to the spokesperson, the firm will also provide a separation package that includes a one-time severance payment of 2.5 to 9 months (depending on tenor and designation), continued insurance benefits, job placement support and accelerated vesting of ESOPs.
Meesho has been working towards reducing cost for more than a year. The company claims to have slashed its cash burn by 90% between January to December 2022. Last year, Atrey also said that Meesho is working on becoming Ebitda-positive by mid-2023 before going public.
While Meesho is yet to disclose its FY23 numbers, its losses jumped 7.5 fold to Rs 3,247 crore in FY22 against a 4.5 times surge in revenue to Rs 3,232 crore during the same period.
Meesho had last raised $570 million in Series F funding led by Fidelity Management and Eduardo Saverin’s B Capital Group at a valuation of $4.9 billion.