Business-to-Business (B2B) e-commerce unicorn Udaan is in the process of laying off about 300-350 on-roll employees as cost optimization becomes a bigger consideration for start-ups over growth.
This is the second round of layoffs at the company in about five months. In June, the Bengaluru-based company had handed pink slips to 180 employees.
Besides the on-roll employees, several of its contractual staff, working in warehouses and in business development and sales, are also being asked to leave, people aware of the development told Business Today. BT couldn’t ascertain the number of affected off-roll employees.
Responding to BT’s query, the company confirmed the layoffs, but declined to offer details about the number of people affected.
“As we move forward in our journey towards making Udaan a profitable company, the efficiency enhancement drive and the evolution in business model has created some redundancies in the system, with some roles no longer required. As a responsible organisation, we are working towards providing all requisite support to the impacted employees,” a company spokesperson said in a statement.
Notably, the development comes just days after the company raised a fresh round of $120 million in convertible notes and debt led by existing shareholders and bondholders.
Announcing the fundraising in an internal email to employees last week, Udaan’s Chief Financial Officer Aditya Pande had stated that company has managed to improve unit economics by ~ 1,000 bps with efficiencies in both gross margins and operating costs.
“The journey of right business design and unit economics has translated into a 60 per cent + reduction in burn. Continued focus on customer-first thinking & initiatives on strengthening our value proposition for them have resulted in monthly buyer repeat rates increasing by 500+bps in the last 2 quarters,” Pande said in his email.
Udaan was valued at $3.1 billion as of January 5, 2022 according to market research platform Tracxn and is backed by 22 investors including the likes of Lightspeed Ventures, GGV Capital, Tencent, DST Global, and others.
“We will continue to invest to build Udaan as a professionally run organisation with scale, capabilities and resilience that can leverage the huge opportunity that kirana commerce offers, while empowering the small businesses of Bharat,” the spokesperson said.
Also read: SaaS unicorn Chargebee cuts 10% of workforce, cites macroeconomic challenges as primary reason
Also read: B2B e-commerce unicorn Udaan raises $120 mn, ready to go public in 12-18 months
Copyright©2023 Living Media India Limited. For reprint rights: Syndications Today