Covid-19 Hits The Startup Industry Hard, As Many Turn To Layoffs And Salary Cuts
These kinds of measures are specifically taken to keep businesses up and running, as it’s not yet certain as to when things would be normal.
Several startups in India have started laying off and have even asked employees to take pay cuts, since they have been looking forward to ways to weather the impact of the Covid-19 outbreak.
There are companies that have cited that these kind of meaures are specifically undertaken to keep businesses running, since it’s not sure as to when things would be coming back to normal. Companies like online insurance firm Acko, has laid off around 50 employees. Among this, a majority of them worked for customer service, operations, sales and marketing segments.
National publications have reported that cloud communications company Exotel has been capping salaries at INR. 40,000 for the upcoming two months and would also be looking at the situation after a month, in order to take further measures. Globally, US-based travel tech startup Fareportal has let go of around 500 employees in India, they received an official notification last week.
It has come to knowledge that it is the online travel portals that have been the hardest hit due to the Covid-19 pandemic as most countries have announced lockdowns and airlines have halted operations. Online ticket booking platforms like MakeMyTrip, Cleartrip, ixigo, and Fab Hotels, a hospitality company feature among those that are looking at salary cuts, while others have started sacking people, according to a data by Big Jobs, a job portal.
National publications have reporetd that startups like Bounce, Drivezy and Udaan have been cutting staff to stay afloat. Reports suggest that Bounce has been laying off employees since last December. The bike rental startup said that it would be looking forward to having pay cuts of around 20-60 percent, in order to ensure 30-32 months runway for the business.
We @bounceshare have announced salary cuts across the org other than those less than 3 Lakhs p.a. The pay cut is graded based on salary. Needless to say, Founders would take a 100% pay cut. This will give us run-way of beyond 30 months. Glad we raised money when we didn't need.
— vivek (@vivekanandahr) April 1, 2020
Also, scooter rental startup Vogo had cut staff in December, and has denied any layoffs or pay cuts so far. However, both Bounce and Vogo have seen a 10-15 percent drop in ridership this March.
As per Big.Jobs information, various firms like online car marketplace Droom, rental platform Rentomojo and edtech firm Adda247 are also eyeing salary cuts and layoffs. According to a report by a national publication, it is noted that Droom’s employees would be taking a 15 percent salary cut from April, but there are no plans for layoffs.
Most startups said that they would be revising their plans after the 21 day lockdown is over, and try to act accordingly. Unicorns too have revoked offers amid the coronavirus pandemic.
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