Vidit Atreya, Founder & CEO, Meesho | Photo credit: The Hindu
E-commerce firm Meesho has laid off 251 employees comprising 15% of its workforce as part of its efforts to cut costs and achieve profitability, a top company official said on Friday, May 5, 2023.
Vidit Atre, founder and CEO of Meesho, informed employees about the decision in an email and announced that all affected employees will receive an additional one month salary after the notice period, as well as an employee stock ownership plan. (ESOPs) regardless of how long they have been with the company.
“We are reducing the size of Meesho’s workforce by 15%, affecting 251 employees,” Mr. Atre said in an internal email.
He added that the company clocked 10x growth from 2020 to 2022, supported by COVID favorable conditions and aggressive investments.
“Even as we tracked our plans, the macro climate undeniably changed significantly. As a result, we had to adjust our GMV growth targets to 30% YoY as part of Project Redbull. The timeline has to accelerate to profitability.
Mr. Atre said, “While our cash reserves keep us well protected for these difficult circumstances, we need to remain extremely prudent on the cost front.”
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A recent Jefferies report said that Meesho is already contribution-margin positive (pre-marketing and indirect expenses) and the company is close to zero cash burn and earnings before interest, taxes, depreciation and amortization (EBITDA). is on its way to do. Breakeven this year.
When contacted, a company spokesperson said: “We have taken a difficult decision to part ways with 251 Meeshoites, which is 15% of the employee base, as we work with a leaner organizational structure to achieve sustained profitability.” want.” The spokesperson added that the company is committed to ensure that all affected get its full support and will be provided with a separate package which includes lump sum severance pay of 2.5 to 9 months (depending on duration and designation), continued insurance benefits, Jobs included. Placement support and accelerated vesting of ESOPs.
“We are grateful for their contribution to building Meesho,” the spokesperson said.