Jeff Bezos, Sequoia Capital-backed SaaS startup Lummo lays off 50-60 employees from its Bengaluru office

Indonesia-headquartered software-as-a-service (SaaS) startup Lummo with a presence in India recently laid off around 50-60 employees from its Bengaluru office, including some working with the company on a contract basis, sources aware of the matter told Moneycontrol.

The lay-offs of Indian employees, which happened on the morning of June 7, come after around 100-120 employees were terminated from the Jakarta office. Sources said in India, employees with engineering and product roles were mostly laid off.

In the early hours of Tuesday, employees in India started receiving direct emails informing them to move on. The company has a total of around 500 employees in its offices in Jakarta and Bengaluru.

A current employee at Lummo, on conditions of anonymity, told Moneycontrol the mail came as a shock to many of his colleagues. He said, “It was a surprise to a lot of employees. Indians did not receive any communication apart from direct email. Indonesia had a meeting and emails came in after the meeting.”

Lummo, however, disagrees with the number and said only three employees were laid off. In a statement, the company added, "Some of the contracts we have with external IT services companies were downsized."

Sources in the know said that Lummo was also facing some leadership level exits lately, without divulging further details.

Another employee said, “Reason given wasn't clear. It was around: role redundancy, restructuring, identifying what product build before growing, cost-cutting to improve the runway, and so on.” He added the reasons given do not justify why specific employees were terminated.

He also informed that the company has assured a severance pay along with a promise that the salary dues would also be settled.

The company added, "We are currently doing our utmost to assist them with their next career opportunity. They are some of the best in the business and we are very sorry to see them go."

Lummo's statement mentioned that the company is working with the affected team members to place them in new roles via their network.

Founded in December 2019, by Krishnan Menon and Lorenzo Peracchione, Lummo has two apps under its umbrella: LummoShop and bookkeeping app BukuKas.

The layoffs were first reported by Inc42 which said that the startup is shifting its focus away from LummoShop, thus resulting in restructuring. However, sources said, there was no official communication from the company on it.

In its communication, Lummo also added, "The company is committed to developing and expanding its services, especially in LummoSHOP, for its entrepreneurs and brands to move forward."

Recently in January 2022, the startup, formerly known as BukuKas had raised $80 million in its Series C funding round led by Tiger Global and Sequoia Capital India, with participation from Amazon founder, Jeff Bezos.

These developments come at a time when tech investors including New York's Tiger Global were significantly reducing their exposure to high-growth companies after the VC firm reported record losses.

In addition, recently, Sequoia Capital, one of the world’s largest venture capital (VC) firms told its founders that the era of being rewarded for hypergrowth at any costs is quickly coming to an end with investors shifting towards companies who can demonstrate current profitability.