A week after securing $120 million in convertible debt, business-to-business e-commerce unicorn Udaan is preparing to lay off 325-350 employees, according to a source close to the developments.
A number of off-payroll contractual workers will also be impacted by the cost-cutting measure, but Moneycontrol could not ascertain the exact figure.
Udaan has around 3,000 employees on the rolls while 10,000-12,000 people work for the company via outsourcing firms.
“The off-payroll workers impacted include roles like those involved in loading and unloading packages and delivery workers as the number of warehouses are being reduced,” said the source.
“The company also has a lot of feet on the street who onboard kirana stores to the platform and teach them how to use it. They are generally offered contracts of 6-12 months which are not renewed when the digitisation work in one area has been completed,” he added.
The Morning Context was the first to report the development.
This is the second round of layoffs at Udaan in the space of a few months. In June, the company had let go of around 180 employees.
“As we move forward in our journey towards making Udaan a profitable company, the efficiency enhancement drive and the evolution in business model have created some redundancies in the system, with some roles no longer required. As a responsible organisation, we are working towards providing all requisite support to the impacted employees,” said an Udaan spokesperson.
In an e-mail to employees last month, chief financial officer Aditya Pandey had said that the company is getting ready to go public in the next 12-18 months. He said that Udaan’s unit economics had improved by approximately 1,000 basis points, with equally strong improvements in both gross margins and operating cost. This, he claimed, has translated into a 60 percent-plus reduction in cash-burn.
Udaan has raised $350 million of financing through debt and convertible notes in the last four quarters. It had last raised equity funding in January 2020, when it was valued at $3.1 billion. Its investors include DST Global, Lightspeed Venture Partners, and GGV Capital, among others.
Notably, the e-commerce unicorn’s valuation crawled from $2.8 billion in 2019 to $3 billion in January 2021 compared to other e-commerce peers – unlike its previous euphoric rise – during the pandemic.
Founded in 2016 by three former executives of Flipkart -- Vaibhav Gupta, Amod Malviya, and Sujeet Kumar -- the company has operations across categories including lifestyle, electronics, home & kitchen, staples, fruits & vegetables, FMCG, pharma, toys, and general merchandise.
In September last year, the company said that Gupta has been appointed as the CEO in line with the evolution needed to become a publicly listed company in 18-24 months. Before the announcement, there wasn't a CEO structure in place with the three co-founders divvying up responsibilities.
Udaan has over 3 million registered users and 25,000-30,000 sellers across 900+ cities, according to the company’s website. The platform has over 1.7 million retailers, chemists, kirana shops, hotels/restaurants/caterers, and farmers carrying out over 4.5 million transactions a month.
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