Clear cuts 16% of workforce amid peak tax-filing season

Clear (formerly Cleartax) has laid off around 20-25% of its workforce in a fresh round of job cuts that took effect on August 1, according to sources aware of the matter. The layoffs have affected several recently hired employees including freshers who had joined just two months ago.

"The company is letting go of 20-25% of its workforce as part of a restructuring exercise," said a source on condition of anonymity. "Around 145 employees have been impacted, and most of them have received standard severance packages.”

Clear has confirmed the layoff exercise but said that only 16% staff were asked to go. 

“At Clear, we have always prided ourselves on being an employee-first organisation - a place where learning, innovation, and growth are core to the experience. We recently undertook a broader strategic organisational restructuring, impacting around 16% of our workforce, including a small number of early-career employees,” said a Clear spokesperson.

“To support them, we have extended enhanced severance packages, continued health insurance, and active outplacement assistance through outreach to industry partners,” the spokesperson added.

As per sources, the layoff also came as a surprise to many new joiners who had barely completed a quarter at the consumer fintech company.

Multiple impacted individuals took to LinkedIn to share their experiences. Anoop Singh, a graduate from IIT Guwahati who joined as a software engineer in June, wrote that the decision felt profoundly unfair as he did not get a chance to prove himself. In his post, Singh mentioned that he was seeking opportunities and connections rather than sympathy.

Another employee Harshit Swarnkar said his offer for the role of software engineer was revoked citing difficult business decisions.

Clear offers taxation and financial solutions for businesses and individuals. For businesses, it provides accounts payable, e-invoicing, and invoice discounting through Finance Cloud, Compliance Cloud, and Supply Chain Cloud. For individuals, it simplifies tax filing and related services.

The fresh layoffs at the company are taking place exactly three years after the last round. In September 2022, the firm fired around 20% of its workforce across departments, including tech, product, sales, and support teams, among others.

Interestingly, the layoffs come during the peak income tax return filing period, a crucial season for the company. Clear earns most of its revenue from taxation-related and corporate secretarial services, and the Indian government has set September 15 as the deadline for filing returns.

According to a source, Clear was facing a cash crunch, which led to the sacking of a large number of employees. The company has not been able to raise a fresh round since October 2021. According to startup data intelligence platform TheKredible, Clear has raised $140 million to date, with Kora, Composite Capital Management, and Stripe as its lead investors.

The job cuts come even as the company reported a sharp rise in revenue for the financial year ending March 2024. Clear posted 93% jump in its operating revenue to Rs 209.84 crore in FY24 from Rs 108.77 crore in FY23. The company also reduced its losses by nearly 59% to Rs 96.24 crore and brought down its total expenditure by almost 10%. Clear has yet to file its annual report for the last fiscal year (FY25).