When startups fail, lives are destroyed: Inside PiQube employees’ struggle to get paid

CEO however says he is doing everything he can to pay them back, 'If I could pledge myself, I would.'
When startups fail, lives are destroyed: Inside PiQube employees’ struggle to get paid
When startups fail, lives are destroyed: Inside PiQube employees’ struggle to get paid

It is distressing to be an employee of PiQube now, either current or former. Some say they are facing emergent family situations, having to deal with problems which require money to save lives – money they don’t have, because they have not been paid salaries for months. And yet, they say they cannot speak openly about it, because they say that they fear PiQube CEO Jayadev Mahalingam will unleash a career-wrecking campaign against them.

For several employees of the recruitment consultancy PiQube, what was once the hope that they will get their dues eventually has now descended into despair. They haven’t been paid for their work for months, but what they continue to hear from the CEO, they allege, are distant promises, or worse, just silence.

The News Minute has spoken to three former employees of PiQube, and reviewed communications of five others. All of them have not been paid salaries for at least four months, with some even waiting for their money for nine months.

The list includes some of the senior-most employees of the PiQube team.

PiQube’s story is an illustration of the fact that when startups fail, they don’t just lead to narcissistic blogs on ‘What I learned from my failure’. There are also careers and lives being derailed.

Trouble came early

PiQube is a Chennai-based recruitment solutions company that was first called Clockwork Interviews, founded in 2014. In November 2014, it won Paypal’s Start Tank Incubation programme in Chennai. As part of this programme, PiQube was given working space and mentoring till it graduated from there in February 2016. In April 2015, it raised $500,000 from The HR Fund.

Jayadev calls himself the ‘Chief Problem Creator’ in his LinkedIn profile. In December 2015, Jayadev told YourStory that PiQube was an “Uber for Recruitment Consultants”, and was “backed by our complex machine-learning algorithms and network of human screeners to ensure the quality of profiles”, and was expectedly gung-ho about the prospects of the company.

However, just a few months later, in March 2016, PiQube began running out of funds. Jayadev and their investor, The HR Fund, started mentioning to employees that the money was running dry, and that they needed their ‘support’ until more funding came through. Initially, the employees were supportive, and agreed to stay on while Jayadev was speaking with various investors and was struggling to raise funds.

The PiQube team, in an image taken last year. 

This was around the same time, according to one of PiQube’s vendors NFN Labs, that Jayadev allegedly started faltering on payments. Following the Stayzilla fiasco, Gokul V of NFN Labs wrote about his experience with PiQube, accusing Jayadev of cheating them by using ‘deficiency of services’ as an excuse. Gokul does not mention PiQube or Jayadev in the blog, but drops a hint with the term “Chief Problem Creator”, and has later divulged their names in media interviews.

Jayadev says that Gokul should not have spoken about it since the matter is sub judice.

Stalling begins

Back to the story. Three months went by, and there was no sign of any new investment – or the salaries. And that’s when, employees allege, he started making distant promises about their salaries.

“Every time an employee asked what was happening, they were met with responses like ‘funds will come soon’ or ‘we are talking to investors and will soon raise funds’,” says a former employee who wished to remain anonymous.

All other employees and former employees TNM spoke to did not wish to be identified either, out of fear of a backlash from Jayadev.

Soon, the workers’ enthusiasm started fading. “Some people stopped coming to work. There was no clarity on the situation. And this started causing trouble among the staffers,” says another employee.

“Soon there was a pattern and we realised that things were indeed going very bad,” a former employee said.

In September, with their full-and-final settlement letters in hand, around 10 employees left the organisation. A few weeks later, some more followed suit. By February 2017, most employees had left PiQube. Not all of them have got their full-and-final settlement letters, according to our sources. And none of them had received a paycheck since June 2016.

Once they left the company, they began requesting Jayadev to pay them their dues. While sometimes, they received generic responses promising them that something will be done, Jayadev was also known to go silent for weeks together, not responding to calls or texts.

The News Minute has seen several text messages sent to Jayadev by his employees over the months, some of which seemed to have remained unanswered for weeks. In some cases, one employee alleged, Jayadev also lost his cool when asked for money.

There were even talks of an acquisition, after which he promised to pay back dues, but that also fell through.

The company owes ex-employees an estimated amount of over Rs 50 lakh. In some cases, individual employees are owed nearly Rs 3-5 lakh. About 10 ex-employees have sent legal notices to the company too, they claim.

“He keeps saying he’s trying to raise funds but for how long can we wait? It has almost been a year. We are asking him to at least give us a solid commitment. And if not the entire amount, we have in the past asked him to pay up at least 10%. If he has not been able to raise 10% of what he owes us in a year, how can we trust him to ever pay us back?” questioned an angry ex-employee.

The employer’s version

Speaking to TNM, Jayadev agrees that he ran out of funds, but maintains he has no intention of cheating them. “I have given them a clear letter stating how much I owe them. I am now devising a plan to pay them back. If I could pledge myself, I would,” he says.

Jayadev Mahalingam, CEO, PiQube

Jayadev also said that he was ‘surprised’ at the allegations made against him. “Everyone was very clearly communicated to at least thrice that we were running out of moneyand that they will only be paid after the next round of funding. Anyone who has stayed, has stayed of their own free will. Five or six people left upon hearing this news too. No one can deny that they did not know that things were going wrong,” he says.

When asked why he started being unresponsive towards employees, he said, “That is impossible. My response time is usually less than 24 hours. I am speaking to each one of these people. At the end of the day, this is blood money on me and not something I want. I cannot deny their effort in bringing PiQube to where it is – good or bad. As the CEO, I will take the blame for what has gone wrong. But I will not take the blame on my integrity,” he says emphatically.

Interestingly, Gokul of NFN Labs too made similar allegations against Jayadev, of not being responsive for several days together. (You can see the text message in his blog here.)

Jayadev says he has not received any legal notice from any of his ex-employees. “But when I do, I am ready to respond to it appropriately,” he says.

Tax woes

This is not the end of employees’ woes. Jayadev is also alleged to have held back on the advance tax of the work force since as early as 2015 – and the employees say they have got I-T notices.

“We have not been given our Form 16 till now. Some employees have not received it since 2015. We are beginning to receive notices from the IT department. Salary is still between him and me. But I cannot tell the I-T department to wait till my ex-boss finds investors,” an ex-employee says.

One of the ex-employees TNM spoke to claims that The HR fund – PiQube’s investor – did give the company some money to pay off taxes to avoid legal implications.

Refuting these allegations, Jayadev says, “The taxes have been paid and the Form 16s are being processed as we speak. This has been communicated to all employees. I'm surprised that they haven't given this information to you.”

Anger and fear

What further angered employees was that while Jayadev claimed that he had no money to pay his ex-employees, PiQube was taking to LinkedIn and other platforms to hire people stating ‘salary no constraint’. The News Minute has viewed these postings. The employees ask how he went ahead and posted these calls for jobs when even existing employees were not being paid.

The reason why all the employees refused to come on record, or even allow TNM to mention specific details and dates of the texts they have provided TNM with a copy of, is because they fear Jayadev. They alleged that he tried to derail the career of an employee who spoke out against him.

He flatly denies this too. “I am trying to understand what I can do to jeopardize someone's career. I gave them all the releasing documents they wanted. I gave them in writing how much I owe them. I even helped a number of employees find new jobs. I am surprised to hear of such allegations being made against me,” he says.

The HR Fund, their investor, however seems to back Jayadev. “The CEO is on ground working to raise funds and pay his ex-employees back. PiQube is still an early stage company only 2-3 years old. Their product is taking time to gain traction and hence the CEO is trying his best to raise funds for the company. It is still too early to talk about its future, though,” says Utkarsh Joshi, Principal of The HR Fund.

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