Pandemic Cripples Startup Sector, Forcing Several Companies to Implement Job Losses and Wage Reductions Due to Covid-19
In the face of the ongoing COVID-19 pandemic, many Indian startups are preparing to reassess their strategies once the 21-day lockdown comes to an end. Several companies, including Bounce, Drivezy, and Udaan, have already taken measures to cut costs, such as reducing staff numbers.
Bounce, a scooter rental startup, has been implementing layoffs since last December, with plans for pay cuts of around 20-60 percent to ensure a 30-32 months runway for the business. The salary cuts at Bounce are graded based on individual salaries, with founders taking a 100 percent pay cut. However, another scooter rental startup, Vogo, has denied any layoffs or pay cuts so far.
Both Bounce and Vogo have reported a 10-15 percent drop in ridership this March. The decline in ridership is not unique to these companies, as online travel portals have been the hardest hit, with firms like MakeMyTrip, Cleartrip, ixigo, and Fab Hotels considering salary cuts or layoffs.
Online insurance firm Acko has laid off around 50 employees, with a majority from customer service, operations, sales, and marketing segments. Meanwhile, other startups like Rentomojo and edtech firm Adda247 are also considering salary cuts and layoffs, according to Big.Jobs information.
Cloud communications company Exotel has capped salaries at INR 40,000 for the upcoming two months, while online car marketplace Droom plans to implement a 15 percent salary cut for its employees from April, with no plans for layoffs.
Unicorns have not been immune to the pandemic's effects, with some revoking job offers and starting to lay off employees. US-based travel tech startup Fareportal has let go of around 500 employees in India.
As the pandemic continues to impact businesses, more startups in India are expected to follow suit and make difficult decisions to maintain their operations. These challenging times underscore the need for startups to adapt and innovate to survive and thrive in the new normal.
