Both the well-funded unicorns and from all sectors of the industry- be it hospitality, food tech, online food delivery or transportation, are opting for downsizing and cost-cutting options to balance out the muted demands amidst the lockdown due to the COVID-19 pandemic. Just in the last two months, thousands of employees have been laid off or are suffering pay cuts after revenues have plummeted.
Current Layoff Reports
Reports have come in that food tech startup Dineout and online realty platform Magicbricks have taken an executive decision to downsize by shearing off their staff count on the grounds of performance benchmarks after both these company's revenue suffered a dent this month. While Magicbricks compelled the employees to resign without severance pay, Dineout has been reported to layoff the staff based on their performance. The numbers have not been confirmed yet.
Online food delivery company Zomato stated last week that it will lay off 13 percent of their employee strength gradually as their revenues are taking a battering thanks to the lockdown. It also stated that it will initiate pay cuts to simmer down the cash burn the company is suffering.
Last month, food delivery unicorn Swiggy laid off no less than 500 contractual employees of its kitchen staff across 10 cities in India as a measure to cut costs.
The hardest-hit sector has been hospitality and travel.
Oyo, the reputed hospitality unicorn, has been laying off its employees since last year and has announced salary cuts last month to save cash after their revenues plunged because of the lockdown sparked off by the COVID-19 pandemic. Other startups catering to the hospitality sectors have decided to follow suit.
Conclusion
Startups and unicorn businesses are scrambling to come up with best-suited plans to reduce the cash burn amidst the revenues which are taking a nosedive amidst the lockdown situation. From downsizing, salary cuts to streamlining of operation, the startups are leaving no stone unturned to survive and sail through these tough times.