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In today’s newsletter:

• TCS CEO Rajesh Gopinathan’s last email to employees
• Valuation markdowns hit Byju’s, Meesho
• Mensa Brands lays off 200 employees

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Rajesh Gopinathan, the outgoing CEO of Tata Consultancy Services (TCS), wrote an emotional note to the employees just two days before stepping down from his position. 

• Gopinathan, a TCS veteran who dedicated twenty-two years to the company, including six as CEO, will stay on at the company till September to help with the transition. 

In his note, Gopinathan expressed his confidence in the company's future, stating that its best years are ahead of it. 

“I will step down from my role as CEO & MD on 31 May, 2023. It has been an absolute privilege to lead our company in the last six years, which have been a period of tremendous growth and transformation for all of us,” Gopinathan said.

He wrote that TCS has set a gold standard in the industry when it comes to financial performance and that the company's focus on "operational rigor, strategic transformation, innovation, and profitable growth" has paid off.

Recounting the high points of his tenure as CEO, he said: 

• TCS’ revenues grew from $17.5 billion in March 2017 to $27.9 billion in March 2023
  
  
• Market capitalisation has gone from $74 billion to $143 billion
  
  
• Returned $27.3 billion to shareholders through dividends and share buybacks

K Krithivasan will take over as the new CEO on June 1, making him just the 5th CEO in the company's 55-year history.

“I wish Krithi the very best as he takes over the TCS baton and charts the way forward to our $50 billion aspiration, I am confident that TCS' best years are ahead, and I look forward to cheering all of you and your continued success from outside,” Gopinathan said.

Towards the end of his note, Gopinathan said he was proud to carry forward the legacy of the three CEO’s before him — FC Kohli, S Ramadorai and now Tata Sons Chairman N Chandrasekharan.

Go deeper

The boom period is now behind us, and the bust period has arrived. And US-based asset management companies (AMCs) are not hesitating to make this evident to Indian unicorns.

Every day, we witness new startups experiencing significant reductions in their fair values. Today, Byju's, the world's most valued edtech startup, and Meesho, a social commerce startup backed by SoftBank, have been added to this list.

Two of the world's largest AMCs, Fidelity Investments and BlackRock, have reduced the fair values of Meesho and Byju's, respectively, in their books.

• Fidelity has cut Meesho’s fair value by 10%, while BlackRock has slashed Byju’s' valuation by 62% 

The markdowns effectively suggest that Meesho's fair valuation would be $4.4 billion and Byju's’ would be $8.4 billion.

• Byju’s was last officially valued at $22 billion, while Meesho raised funds at $4.9 billion

These adjustments are based on AMCs’ internal assessment of the macro and micro environment and do not necessarily indicate a permanent markdown in the startup's overall valuation. 

Nonetheless, these adjustments do provide forthcoming investors with some perspective regarding the company's valuation.

• Byju’s is already in the process of raising a new round at a flat $22 billion valuation, the second for the edtech in seven months

• Meesho, on the other hand, is well-capitalised, thanks to a sharp cut in its monthly burn, and might not need to raise fresh funds anytime soon

Just when we thought the news around layoffs was starting to die down, another round of firings has hit a large startup.

Mensa Brands, the company founded by the former CEO of Myntra, achieved unicorn status at an incredibly fast pace. However, the company is now facing the need to downsize its workforce, resulting in 200 employees, which accounts for around 25% of its total workforce, being let go.

• The layoffs affected employees across all divisions, with the India Lifestyle Network (ILN) division being the most affected. (ILN was part of Times Internet, which Mensa acquired in December 2022)

• The company has, however, denied the number of employees affected and stated that only 30 employees were let go as part of a restructuring exercise

The company, according to sources, told employees that their performance was unsatisfactory which led to lacklustre growth at ILN. 

"Employees from ILN were called for a one-on-one session with the HR and were asked to leave the very next day. While some employees were fortunate enough to get two months' pay as compensation…others were only given one month's salaries and asked to leave immediately," the source told us.

 Mensa has joined the growing list of new-age companies resorting to layoffs in their pursuit of profitability.

• In total, about 6,150 startup employees have been laid off so far this year alone. And since 2022, around 24,500 employees have been sacked

Find out more

On May 30, 1996, AT&T  held a meeting to announce a system that offered the capability for personal computers to make and receive video phone calls over standard telephone lines. 

The AT&T system used Intel Pentium processors and compression software to enable seamless sharing of both video and audio information over standard phone lines, eliminating the need for costly high-capacity ISDN, T-1, or T-3 lines.

• Binance CEO Changpeng Zhao dismisses the possibility of purchasing banking institutions amid concerns over crypto companies being debanked, including Binance Australia.

• Russian lawmakers have scrapped plans for a state-owned cryptocurrency exchange and are now working on regulations to enable private companies to establish and operate trading platforms, supervised by the country's central bank.

Airships were once considered the transportation of the future, but their popularity was all but destroyed by the Hindenburg disaster in 1937.

Now, a new generation of airships is poised to make a comeback. Lighter Than Air, a company backed by Google co-founder Sergey Brin, is getting ready to unveil its first airship, the Pathfinder 1.

The Pathfinder 1 is 122 meters long and 20 meters in diameter at its widest point.

Find out more

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