Bike rental startup Bounce laid off 40 employees about 20 days ago, a company spokesperson told TechCircle on Thursday. Of those, 30 worked in its customer care division and 10 in its corporate division.
The recent automation of Bounce’s customer care service on its mobile app, which solved generic customer issues without the need for an executive, was one of the key factors for the job cut, the spokesperson said
The laid off employees have been given three months of severance pay and insurance, the spokesperson said, adding that the company was “also working with consultants and other startups to get them placed”.
Earlier on Thursday, Entrackr, an online publication, published a source-based report, saying that Bounce had laid off 120 employees, about 20% of its 600-strong workforce, in a bid to cut costs and preserve capital.
The company spokesperson denied the figures, adding that about 40 contractual engineers, after completing a time-bound carpool test project, had left the company in the past week.
“We finished building the pool product and hence let go of the contract staff and got it into production,” the spokesperson said.
The company has also cut some on-the-ground operations due to improved internet of things applications, the spokesperson said. For example, the company has now automated the redistribution of vehicles instead of using trucks to move vehicles, he said. These operations involved third-party vendors.
The job cuts come around the time when high cashburn and gig economy-based consumer-centric startups, which require face-to-face interactions in their service offerings, expect a global dip in demand due to the Covid-19 pandemic. They would also need to conserve capital to survive till the next fundraise, according to multiple venture capitalists TechCircle spoke to.
“We have seen a dip of 10-15% in our daily rides. In fact, we are urging users to use our services only if important. We sent out push notifications to all,” the spokesperson at Bounce added.
Bounce was among the country’s technology-based startups that sprung into action to contain the crisis and maintain business continuity. It had asked its employees in Bengaluru and Hyderabad to work remotely.
In a separate development on Tuesday, Bounce signed an open letter, along with 34 other startups and venture capitalists, asking the government to impose Section 144 and lockdowns across key cities from March 20 to contain the spread of Covid-19.