The last two years have been bleak for India’s startup ecosystem, and there seems to be no sun on the horizon even at the beginning of 2024.
Fitness startup Cult.fit has laid off 150 employees as a part of a cost cutting exercise, Moneycontrol reports. Mid to senior level employees were the most impacted by the decision. Cult.fit is a part of Cure.fit which also runs brands like Sugar.fit, Carefit, and had earlier spun off its food vertical, eat.fit. The company is backed up several big names, including Tata Digital and Zomato.
“As part of our regular annual operating planning process, we have reduced some redundant positions with the aim of streamlining operations,” Cult.fit said in a statement. “This is aimed at improving productivity and setting us up for full profitability in FY25. We have done this with thoughtful consideration and with the interest of creating long term value for our stakeholders,” it added.
Sources said that the decision was driven by a need to cut costs. “Cult.fit looks to lower its monthly cash burn by a few crores and bring it down to about Rs 10 crore. With that target in mind, the company has let go of employees from the mid to senior level category lower employee costs,” a source told Moneycontrol.
Cult.fit had been founded in 2016, and had become a unicorn in late 2021. But like other unicorns, it’s struggled to make money — in FY23, it had reported revenue of Rs. 694 crore, and losses of Rs. 551 crore. The company is now focusing on more traditional offline centers as opposed to the tech-enabled fitness classes it had earlier launched — it had acquired a majority stake in F2 Fun & Fitness, and become a master franchise partner for Gold’s Gym in India. This transition to a more offline-focused business model appears to have necessitated layoffs at some of its divisions including sugar.fit, care.fit and cult.fit.
Cult.fit isn’t the only Indian startup that’s laid off employees in 2024. Just this month, it has been reported that Flipkart will lay off over a thousand employees, and InMobi will lay off 125. This followed a brutal last couple of years, which saw dozens of Indian unicorn startups lay off thousands of employees. And with these layoffs continuing into 2024, it appears that there might be still plenty of pain in the offing for Indian startups in the coming quarters.