Online shopping platform Meesha has decided to reduce 15 percent of its workforce or 251 employees as it looks to work with a leaner organisational structure to achieve sustained profitability, the firm said on May 5.
Meesho spokesperson, in a statement, said, all those affected by the job cuts will be provided a separation package that includes a one-time severance payment of 2.5 to nine months (depending on tenor and designation), continued insurance benefits, job placement support and accelerated vesting of ESOPs.
Severance package for laid off employees includes
- Full pay for notice period
- 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.
First Published: May 5, 2023 10:39 AM IST
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