Even as funding rounds are slowly beginning to trickle in for startups in the funding winter, employees are still getting the short end of the stick.
Udaan has laid off 100-120 employees days after announcing a fresh funding round. Udaan had raised $340 million (Rs. 2,800 crore) in a funding round last week led by UK savings and investment firm M&G Prudential and existing investors Lightspeed Venture Partners and DST Global. But today, the company has laid off 100-120 employees, which amount to 10 percent of its workforce.
Most of the job cuts happened in the go-to-market (GTM) team, which handles relationships with sellers, among other responsibilities, ET reported. The layoffs were reportedly due to redundancies following a rejig of the business in September, which had combined Udaan’s ‘Essentials’ vertical, encompassing fast moving consumer goods, staples and pharmaceutical categories, with its ‘Discretionary’ vertical, which includes the general merchandise, lifestyle and electronics categories.
An Udaan spokesperson confirmed the layoffs, saying “interventions” that were made to build’ a “profitable business” had “resulted in some redundancies in the system”, without revealing specific details or figures. “We are working towards providing all the requisite support to the impacted employees, including medical insurance, and a compensation package as per company policy and placement assistance,” the statement added.
But this isn’t the first time Udaan has laid off employees in the recent past. It had laid off 1000 employees in November 2022, of which around 350 were full-time employees, and the rest were contractual workers. In June 2022, the company had fired 200 full-time employees and around 700 contract workers. In 2020, as the coronavirus pandemic had hit, it had fired 500 full-time employees and 2000 contract workers.
This is a pullback for Udaan, which had in 2018 become what was then the fastest startup to enter the unicorn club, attaining a $1 billion valuation within two years of being founded. Udaan was founded in 2016 by three high-ranking Flipkart employees as a B2B trade platform which was designed for small and medium businesses. It aimed to bring traders, wholesalers, retailers and manufacturers on to a single platform, from where they could transact among themselves and grow their businesses.
But the company has had to contend with strong competition, both from traditional distributors who’re unhappy about the startup eating into their business, and also from newer players, such as Reliance’s B2B arm. Udaan is also taking hits on its balance sheet — its revenue shrunk 43 percent from Rs. 9,900 crore in FY23 to Rs 5,629 crore in FY23. It is still making losses, losing Rs. 2,072 crore last year. It’s now raised itself another round — its first since 2021 — but it seems it was contingent on the company further trimming its already-depleted workforce.