Tiger Global-backed used car retailing platform Spinny has sacked around 300 employees in a cost-cutting exercise, which has hit Truebil and Spinny Max staffers the hardest as the two divisions merge, sources have told Moneycontrol.
The layoffs, announced by co-founder and CEO Niraj Singh during a town hall meeting on August 2, come at a time when the demand for used cars has slowed down across the industry after a sharp growth during the coronavirus pandemic years.
"The company has told employees that both Truebil and Spinny Max will now be merged and operate under the main Spinny brand because of which there will be job redundancies," one of the sources told Moneycontrol, a development confirmed by the company as well.
In 2020, when deal making for startups was at an all-time high, Spinny acquired Truebil, a Mumbai-based rival, to strengthen its presence in the budget-car segment.
Spinny Max, on the other hand, deal with pre-owned luxury cars from companies like BMW, Mercedes and Jeep, which translates to bigger ticket sizes for the company.
Business rejig
Spinny has about 6,000-6,200 employees and the sackings affect 5 percent of the workforce, Moneycontrol has learnt.
The Truebil website has begun redirecting customers to the main Spinny website. It operated independently earlier.
Some employees also took to LinkedIn to talk about the layoffs. "I would like to announce that I have been laid off (from) Spinny... My tenure here was a very enriching but short-lived one. As bitter as this may be, life goes on...," a LinkedIn user posted on August 2.
A spokesperson for Spinny confirmed to Moneycontrol that the two divisions were merging.
“This business reorganisation will strengthen our go-to-market business model, reduce costs and improve our margin profile, putting us on an expedited path to profitability. However, it will impact approximately 4.5 percent of our total workforce as we consolidate our operations under a single brand," the statement said.
The company was seeing a sharp uptick in demand for reliable, budget-friendly cars as most people had resumed work from office. By splitting the inventory across different brand platforms, the company was sometimes unable to offer enough options to such customers. “With this consolidation, we should be able to meet the needs of these customers well,” the spokesperson added.
Gurugram-based Spinny competes with SoftBank-backed Cars24, which, too, fired more than 600 employees, or about 7 percent of its workforce, in May 2022.
As funding dries up, Indian startups have taken the cost-cutting route and fired more than 25,000 employees since early 2022, Moneycontrol reported in June.
A consolidation is also underway in the used-car space. In July, online auto platform CarTrade Tech said it inked an agreement to acquire the operations of classified space brand OLX in India from OLX India BV (OIBV) for Rs 537 crore. OLX Autos directly competes with Spinny.
Spinny, which runs more than 55 car hubs and operates in over 22 cities, continues to be bullish. Last year, it opened a five-acre park in Bengaluru, its largest hub.
CEO Singh had told Moneycontrol that the average selling price in Bengaluru was the highest at Rs 6.4 lakh compared with an average order value (AOV) of Rs 5.7-5.8 lakh in the entire country.
Founded in 2015, Spinny has raised around $530 million so far, including a $283 million round in November 2021 which made it India’s fourth online car retailer unicorn after Cars24, CarDekho and Droom.
Valued at around $1.6 billion, Spinny is backed by several marquee investors such as Abu Dhabi’s ADQ, General Catalyst, Blume Ventures and Accel, as per Tracxn, a private markets data provider.
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