Bengaluru based hyperlocal startup Housejoy has laid off more than 40 employees across departments. As per an ET report, the Amazon-backed startup is battling increasing costs amidst times of slow revenue growth. 

As per the report, many of the exits have been at mid-management levels across its digital marketing, technical and back-end operations teams. The startup is looking to cut down or shut categories that offer little or no unit margins such as specialized lifestyle and health services. 

The startup has raised about $27 million in total funding from investors such as Amazon, Vertex Ventures, Qualcomm and Ru-Net Technology Partners. However, it has been struggling to raise capital since 2016.

Amazon’s investment in Housejoy was with the intent to enter the growing home services market, which is expected to grow to $300 million by 2020, as per a Redseer Consulting report.

But Housejoy’s layoffs highlight the fact that mounting operational expenses, high customer acquisition costs, low-profit margins, and the advent of me-too startups continue to trouble startups in this space.