Apart from layoffs, most startups have also effected pay cuts, with some founders taking a 100% pay cut for the year.

From Swiggy to Bounce startups resort to layoffs as COVID-19 impacts economy Image for representation
Atom Startups Saturday, April 25, 2020 - 16:25

Startups, which were in the news until now for high valuations and funding requirements, have now been pushed over the edge by COVID-19, leading to pay cuts, layoffs and furloughs in companies of all sizes, and in all industries. 

With little certainty about what comes next, startups have also been demanding relief from the government to tide over this period as well. 

A list of major startups that were impacted:

OYO: The hotel chain announced earlier last week that some employees were being furloughed for four months and the salaries of all employees — except those earning below Rs 5 lakh — was being cut by 25%. OYO’s leadership had announced that they were taking salary cuts of 25-50%, and founder Ritesh Agarwal was forgoing his salary for the rest of the year. Those who were furloughed are entitled to some benefits.

Swiggy: The company’s driver-partners, who are not officially their employees, are already struggling to make income for this period due to the lockdown. In addition to this, Swiggy stated that it was going to be laying off employees from its cloud kitchens. According to reports, 500-900 people are expected to be impacted due to this. Swiggy’s cloud kitchen brands include Bowl Company and Homely. According to TechRadar, 50% of Swiggy’s kitchens are likely to be shut, and the ones to be laid off will be low performers. 

Grofers: The online grocery marketplace furloughed upto 70 employees for three months from their offline sales and beauty divisions, reported ET. The company is reportedly attempting to absorb the employees and has done so for 38 already. Among the remaining, the furloughed staff will get 33% salary along with insurance till the company finds a placement for them within the organisation. 

Bounce: Bike-rental startup Bounce laid off 20% of its staff, who mostly belonged to mid and senior levels as a measure to cut costs, reported Entrackr. The company’s founders took a 100% cut in pay. The rest of the staff will see pay cuts between 20% and 60%.

Travel Triangle: The holiday package marketplace laid off 250-300 people, reported Entrackr. The report added that many were not paid severance.

Treebo Hotels: Budget hotel chain Treebo hotels was reported to have launched a paid voluntary resignation scheme for employees after bookings were hit. If employees resigned voluntarily, they would get one month’s salary subject to a minimum of Rs 30,000/- pre-tax in advance, and their notice period would be waived off. 

In addition to this, the company’s founders took a 60% pay cut, and the senior management 40%.

Fab Hotels: The budget hotel chain laid off over 100 employees due to hardships caused by COVID-19, according to PTI. Termed ‘resource optimisation’, Fab Hotels reportedly laid off people from the operations, tech, sales and supply acquisition teams

Pay cuts were also put in place. The founders will take a 25% pay cut, employees earning more than Rs 25,000 will take a 20% pay cut, and those earning less than Rs 25,000 will get a 15% pay cut.  

Ixigo: Founders of the travel aggregator decided to forego their salaries till business is back on track. In addition, the company’s leadership will take a pay cut of 60% and the staff will see pay cuts of 20-50%. TechCrunch reported that founder Aloke Bajpai said that salaries would return to their current levels when business is better, and the salary reduced due to lockdown would be converted into ESOPs. 

Instamojo: Payment gateway laid off some employees due to COVID-19, as well as instituted pay cuts across the board of 10-40%. The company’s founders took the highest pay cut of 40%. A third of employees were not considered for the pay cuts and are unaffected, reported Business Standard. 

Acko: The insurance technology startup laid off around 10% of its workforce — around 45-50 employees, reported Entrackr. The company’s leadership took pay cuts of 45-70%. 

Meesho: The social commerce copy is reported to have laid off around 200 employees.

Shuttl: The app-based office commute service reportedly fired 40 people and asked 100 people to resign voluntarily. 

Become a TNM Member for just Rs 999!
You can also support us with a one-time payment.