SoftBank-Backed Meesho Cuts 15 percent of Workforce, 251 Employees as Part of Cost-Cutting Strategy
Meesho focuses on sustained profitability with a leaner structure after layoffs
5 May 2023
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Kunal Tyagi
Meesho, a SoftBank-backed e-commerce company, has laid off 15% of its workforce, or 251 employees.
Meesho aims to achieve sustained profitability and adjust its GMV growth goals to 30% YoY under Project Redbull, which requires a leaner organizational structure.
The affected employees will receive a separation package, including a one-time severance payment, continued insurance benefits, job placement support, and accelerated vesting of ESOPs.
Meesho, a SoftBank-backed e-commerce company, has cut 15% of its workforce, or 251 employees. Vidit Aatrey, the company's co-founder and CEO, announced the layoff in an email, citing errors in over-hiring and the need to align the people cost with new projections. Meesho aims to achieve sustained profitability and adjust its GMV growth goals to 30% YoY under Project Redbull. Aatrey acknowledged that the leaders of the company could have run the organization structure in a more effective and lean manner. This is the second round of layoffs for the company, the first affecting its grocery arm last year. The separation package includes a one-time severance payment, continued insurance benefits, job placement support, and accelerated vesting of ESOPs.
Meesho has been on a cost-cutting strategy since last year to turn profitable by mid-2023, but the macro climate undeniably and considerably changed. The company grew by 10X from 2020 to 2022, helped by COVID tailwinds and aggressive investments. Meesho will remain grateful for the contribution of the affected employees in building the company. As a result of this decision, Meesho will continue to work with a leaner organizational structure that will allow them to adjust their GMV growth goals to 30% YoY under Project Redbull, achieve sustained profitability, and stay strong in the long run.
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Meesho has stated that they are committed to ensuring that all those impacted by the layoffs have their full support. The company will provide a separation package that includes a one-time severance payment of 2.5 to 9 months, depending on tenure and designation, continued insurance benefits, job placement support, and accelerated vesting of ESOPs. Employees will also have access to Gmail and Slack channels until Sunday evening.
The outgoing workers will receive full pay for their notice period and an additional one month, along with a tenure-based payment of 15 days’ pay for every completed year of service, rounded up to the nearest half-year. Meesho has confirmed that impacted employees will receive an email in the next 60 minutes, informing them of the status of their employment with the company. Afterward, meeting links will be shared personally to facilitate one-on-one conversations between the staff members and their managers.
While this decision to lay off employees is difficult, Meesho remains confident that the company's business will stay strong. They acknowledge the hard truth of aligning their people costs with new projections for their business, and they believe that they should have done better. Despite the challenges they are currently facing, they remain optimistic about the future and are committed to their vision of empowering millions of small businesses across India.
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