Third Wave Coffee, a specialty coffee and food brand that counts Zerodha co-founder Nikhil Kamath among investors, has fired 100-120 employees, people aware of the developments told Moneycontrol.
The decision to trim headcount comes months after the Bengaluru-based startup raised $35 million in its Series C funding round led by Creaegis, a private equity firm, Westbridge Capital and Udaan’s Sujeet Kumar. To be sure, Kamath did not participate in the company's fundraise in September and holds less than 1 percent stake in the startup.
Employees across teams such as tech, finance, marketing, business development and app were let go. “The head of HR and the founder have coming to each of us, speaking for 10-15 minutes and informing people that their roles are no longer needed in the restructured organisation,” one of the employees cited above told Moneycontrol on the condition of anonymity, fearing repercussions.
“This has been going on for the past two days and there is going to be another round tomorrow (December 15). The best part? No one knows what a restructured organisation means. I thought we were doing well as a company,” the employee added.
Even senior leaders have been impacted by this decision. Third Wave, which is also backed by Gaurav Munjal and Roman Saini of Unacademy, will pay all affected employees two months’ salary in case they wish to leave immediately or has even offered employees the option to work until the mid of February in case they wish to.
"TWC post a strategic review has decided on a one-time restructuring exercise to consolidate our teams, impacting less than 10 percent of the organisation. As an organisation we are in a strong position post the recent fund raise. We will continue to scale and build TWC as India’s most loved coffee brand," the company said in response to Moneycontrol's queries.
There was no written communication informing employees about the headcount reduction, and it was all done in-person at Third Wave’s office, according to people aware of the developments. The decision comes at a time when Third Wave said it will be expanding its offline footprint across the country. The coffee startup already has over 100 stores in India.
To achieve its growth targets, the startup has already raised a total of over $65 million from a clutch of angel and institutional investors, as per Tracxn, a private markets data provider.
The investor interest in these startups are understandable since the specialty coffee space in India is warming up, with the entry of a number of home-grown brands which are giving global giants like Starbucks a run for their money.
Third Wave Coffee Roasters competes with Blue Tokai, Slay Coffee, Sleepy Owl Coffee, Hatti Kaapi and traditional chains such as Cafe Coffee Day, among others.
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