Business-to-business commerce online startup Udaan has laid off about 10-15%, or roughly 3,000-3,500, of its contract staff, as per an ET report. The job cuts are on account of the COVID-19 pandemic, which has majorly dented the company’s revenue from non-essential categories including electronics and apparel.
The company, however, said it would honor all campus placements and pending job offers.
A spokesperson revealed, “We are adapting to the structural changes in demand in India which is impacting our current infrastructure … Driven by economies of doing business in a sustainable manner, we are compelled to restructuring our teams which has unfortunately made some roles redundant.”
While many employees have taken to social media to share that they were terminated without any due notice or information, Udaan, however, said it was providing a month’s gross salary as severance and medical insurance for three months to the laid-off employees.
The startup’s businesses also comprise of fresh food and pharma which come under the essentials category. Last year, it had also received a license from the Reserve Bank of India for non-bank financing business.
The startup though having recently raised $585 Mn in a funding round last October, finds itself caught in the economic turbulence on account of COVID-19. With the economy showing no or very weak growth signs for at least the next eight-ten months, operating costs have become a concern. Blue and grey, including entry-level white-collar jobs, have been the most impacted by the lockout on account of the pandemic. And it is imperative that companies take as many steps as possible to protect the livelihood of these employees. However, given the economic fallout, more job losses in startups are looming on the horizon.