Softbank-backed e-commerce firm Meesho plans to complete the integration of its grocery business by the first week of May, and rebrand it as Meesho Superstore. Meesho, a social commerce startup, recently laid off around 150 employees from its grocery arm, which became part of its core app, Meesho Superstore.
The company’s blog post stated it would “boost efficiencies in light of the integration” and it had “removed redundancies” of a “small” number of full-time roles and certain third-party positions on a six-month contract.
The redundancies won’t affect any positions within Meesho’s core marketplace business, which will continue to hire and grow talent.
Meesho is providing severance packages to the sacked employees as well as outplacement assistance to help them find new jobs.
Affected Roles, No Prior Notice
The affected roles include city managers, product managers, designers, and executives who worked on the Superstore’s user interface.
Sources report that none of the employees were given advance notice of their terminations.
By the first week of May, the company expects to complete the integration of the grocery business.
With this integration, the 100 million+ users of the company will have access to over 87 million active product listings across 36+ categories.
In Karnataka, the startup launched a pilot program to make online grocery shopping accessible to first-time shoppers.
Since then, it has expanded its grocery offering to five states – Maharashtra, Telangana, Andhra Pradesh, Gujarat, and Madhya Pradesh.
Reducing Cash Burn Ahead Of IPO
According to sources, the company is looking to move into the grocery business in order to reduce its reliance on city executives.
The layoffs are also believed to be an attempt to reduce the company’s cash burn before the company’s public listing in the first half of 2023.
In fiscal year 2021, it reported a revenue of Rs 792.8 crore and a loss of Rs 498.6 crore.
Competition from ecommerce giants like Amazon, Flipkart, and JioMart is fierce.
Therefore, it has been burning $20-25 million per month, which reached a high of $50 million per month earlier this year.
Meesho spent Rs 1 to earn 0.59 paise in the year ended March 2021, with Rs 1,337.3 Cr in expenses and Rs 792.8 Cr in revenue.
String Of Startups Layoffs
Meesho is following a number of startups this year that have laid off scores of employees.
Unacademy, Furlenco, Trell, OkCredit, and Lido are some of them.
There are currently 2000 employees at Meesho, and the company has no plans to downsize any further.