Meesho layoffs: E-commerce platform lets go of 251 employees, cites ‘judgement errors in over-hiring’

- Additional one month pay, along with a tenure-based payment of 15 days pay for every completed year of service, rounded up to the nearest year

- The company will also extend family insurance coverage till March 31, 2024.

- It will relax ESOP vesting norms so the departing employees remain shareholders in the company

In an email dated May 5, co-founder and CEO Vidit Aatrey informed the company's staff about the layoff. “As leaders, we made judgement errors in over-hiring ahead of the curve. At the same time, we could have run our org structure in a more effective and lean manner overall," Aatrey said in his email.

The Bengaluru-based company was among the first few new-age startups in India that cut jobs in 2022 and let go of 250 employees from its grocery arm, which was rebranded to Superstore from Farmiso. The latest round, however, is the first one at Meesho's marketplace model, its core business.

Informing about the latest round of layoffs, Aatrey told staff that the company’s spans and layers were inflated, and this could have unintended consequences on its speed to execute. “While we are confident that Meesho business will stay strong, the economic reality is here to stay. We are now faced with the hard truth of aligning our people costs with the new projections for our business. We should have done better here," he added.

In order to cut costs and solve the issue of over-hiring during the pandemic, companies around the world, especially in the tech space, have been laying off employees in an uncertain macro environment.

Indian startups began reducing workforce around July 2022 and have laid off over 6,000 employees in 2023 while the number goes past 20,000 for 2022.