Fashnear Technologies, the holding company of social commerce app Meesho, has laid off several people from its 700-800 workforce, two people privy to the development told TechCircle.
The layoffs come a little over a week after Meesho founder and CEO Vidit Aatrey told employees over a video call that there would be no job cuts due to the Covid-19 impact on the company’s business, an employee who had been laid off told TechCircle on the condition of anonymity.
About 40% of the company’s key account managers, all business relationship managers and about 30-40% of the business development team have been laid off, the employee said.
The exact number of people impacted by the firings could not be independently verified by TechCircle. However, an Entrackr report on Wednesday said, citing sources, that over 200 people were fired.
Employees of the Facebook and Naspers-backed company were asked to submit resignations on email, the employee cited above said. Supervisors, he added, informed them that the job cuts were due to the outsourcing of their roles and had nothing to do with Covid-19.
However, there was no prior intimation given to employees about the outsourcing of the business development operations, he said.
“... They said they will compensate us with a three-month salary. Most of the employees are jobless and have no idea what to do after this… We need justice, we don’t want the job back -- if they give us a job, they will trouble us… we need a year's salary,” another laid off employee, who also requested anonymity, told TechCircle.
A Meesho spokesperson did not respond to TechCircle’s queries on the matter till the time of publishing this report.
In August, Meesho had raised $125 million in a funding round, led by South African consumer internet group Naspers. The same round saw participation from social media platform Facebook, which had invested $25 million in the company in June.
Founded in 2015 by IIT Delhi graduates Aatrey and Sanjay Barnwal, Meesho lets re-sellers set a profit margin on a shared basis. In September, it dragged rival GlowRoad and its former employees to court, alleging data theft. The companies also made scathing public statements online, with GlowRoad CEO Shekhar Sahu calling out Meesho for having served legal notices to its former employees.
The company had reported a wider annual net loss as operating expenses increased in the financial year ended March 31, 2019. Its net loss had widened to Rs 100.4 crore from about Rs 5 crore a year earlier. The company’s revenue also rose to Rs 84.9 crore from Rs 6 crore in the same period.
Much of the company’s expenses went towards employee salaries, logistics, marketing and reseller bonus, discounts, rewards and reimbursement, regulatory filings showed.
In February, it launched its first share buyback programme, where 60% of eligible employees exercised the option to sell up to 30% of their vested employee stock ownership plan (ESOP) shares. Returning investor Naspers bought employee stock options worth $1 million.