Scooter rental startup Bounce on April 1 said that it is cutting employee salaries across levels, with founders forgoing their entire salary, to extend the company’s cash runway after the coronavirus pandemic has halted business and led to a lockdown.
Employees would take pay cuts of 20-60 percent based on salary slabs, a part of which will be compensated by employee stock options, co-founder and CEO Vivekananda Hallekere tweeted.
The pay cuts will enable Bounce to have a cash runway of over 30 months, after its operations have been suspended in most cities due to the disease outbreak and the resulting lockdown.
Bounce’s 500-600-strong workforce will take a pay cut for six months, but the period could be reduced based on how India recovers and gets back to business as usual, Hallekere told Moneycontrol.
“The idea is to return to normal ride-levels we used to do before, which is the internal milestone,” he added.
Bounce is the best-capitalised company in the sector, having raised nearly $200 million in equity so far. It raised $105 million in January led by existing investors Accel and B Capital, prior to which it raised $72 million in June last year led by B Capital and New York-based hedge fund Falcon Edge Capital.
Online news portal Entrackr reported on March 19 that Bounce laid off 120 people from its customer support and ‘new initiatives’ teams to conserve cash. However, Hallekere denied the development and said it has laid off only about 30 people in the customer care function.
Bounce’s rival Vogo also trimmed 15 percent of its workforce across hardware and product teams, its CEO Anand Ayyadurai confirmed last month.
A number of startups across sectors are laying off employees and/or announcing pay cuts to sustain the company longer in the event it is unable to run operations and raise capital from investors due to the COVID-19 outbreak.
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