Dailyhunt and Josh parent VerSe reverses pay cuts, expands ESOP pool

Umang-Virendra - DailyHunt

VerSe Innovation, the parent company of news aggregator Dailyhunt and short video platform Josh, has reversed the pay cuts it announced for employees in November and expanded the ESOP (employee stock option plan) pool, in a rare instance of a unicorn overturning cost-cutting initiatives in the recent past.

The company, which also laid off about 150 employees in November, had announced salary cuts of up to 11 percent for employees earning more than Rs 10 lakh amid worsening macroeconomic headwinds.

In a town hall on April 11, Umang Bedi, co-founder of VerSe, said that the company would be reversing these pay cuts starting next month as the macroeconomic situation is now looking "much better," people aware of the matter told Moneycontrol. Bedi also told employees that the company will be expanding its ESOP pool and will be giving incentives to employees based on their performance for FY23 (2022-23) or the previous financial year.

Bedi confirmed the development over WhatsApp.

"We are pleased to announce that we will be reversing the 11% pay cut that was implemented earlier for the entire company. We value the hard work and dedication of our employees, and this decision reflects our appreciation for their contributions to the success of VerSe," Bedi told Moneycontrol.

"Furthermore, we are excited to commence our performance appraisal process for FY23, which will pave the way for Performance Linked Incentive (PLI) payout and additional Employee Stock Ownership Plan (ESOP) allocation to all our employees. We believe in recognizing and rewarding the performance and dedication of our employees, and this initiative reflects our commitment to their professional growth and success," he added.

VerSe's move to overturn its cost-cutting initiatives comes at a time when most startups in India, including the heavily-funded ones, are taking becoming extremely conservative on spending on employees as the funding winter is showing no signs of easing. Recently, SoftBank-backed Unacademy said that its founders will be taking pay cuts along with its top management and would also not do cash appraisals for FY23.

VerSe Innovation, which was earlier backed by ByteDance, the parent company of the world’s biggest short video platform TikTok, was founded by Virendra Gupta and Shailendra Sharma in 2007. Umang Bedi joined the firm in February 2018.

The company launched the short video platform, Josh, in 2020 soon after the TikTok ban and has clocked significant growth. However, ByteDance exited VerSe Innovation in June at a whopping 56 percent discount, Moneycontrol reported.

VerSe Innovation reported a whopping loss of Rs 2,563 crore in FY22 (2021-22), which widened from Rs 808 crore in FY21 (2020-21). The company’s operating revenue, however, grew 46 percent to Rs 965 crore from Rs 666 crore.