The laid-off employees will receive severance pay equivalent to three months of salary along with extended health insurance coverage until the end of the year.
Meesho, which operates an online marketplace for small businesses and individual entrepreneurs, has raised over $1.5 billion in funding so far, including a $570 million Series G round in February 2023 led by SoftBank Vision Fund 2.
The company claims to have over 40 million registered users and more than 10 million monthly active users. Meesho has been trying to diversify its revenue streams and expand into new categories such as electronics, home decor, and personal care products.
However, the company has been facing stiff competition from other e-commerce players such as Flipkart, Amazon, and Reliance JioMart, which have also been aggressively expanding their reach in India’s online retail market.
The latest layoff at Meesho comes amid growing concerns over the financial health of several Indian startups that have raised large sums of capital in recent years but are yet to turn profitable. Many investors have been pushing for startups to focus on profitability rather than growth at all costs.
This is the second layoff for the Bengaluru-based startup within a year. In August 2022, the firm shut down its grocery business Farmiso and integrated it into the core app of Meesho. In this process, nearly 300 employees were laid off as per media reports. It seems that Meesho has been going through a period of restructuring, with the integration of its grocery business into the core app and now this latest round of layoffs. It is not uncommon for startups to experience such changes as they grow and adapt to market conditions. However, it is important for the company to ensure that its employees are treated fairly and with respect during these transitions. It is also worth noting that over-hiring can be a common pitfall for startups as they try to scale rapidly, and it is important for companies to be mindful of their hiring decisions and to have a clear understanding of their future growth plans.