CARS24 lays off 600 employees; calls it ‘business as usual’
Used car marketplace CARS24, which is backed by global funds like SoftBank and Alpha Wave Global, has laid off over 600 employees in what the company called "business as usual", joining the likes of several startups that have seen churning in recent weeks. The employees that have been let go are around 6% of its total workforce of 9,000 employees.
A company spokesperson said contrary to the reports, the layoffs are based on performance-based criteria. “This is business as usual. It is a part of performance-linked exits that happen every year," the Cars24 spokesperson told Fortune India.
Sources say the company's move could be in line with the pan-industry scenario where companies are cutting costs as raising money gets difficult in tougher market conditions. Cars24 has not revealed the departments that have been affected due to the current round of layoffs.
These layoffs, however, come around four months after Cars24 closed a fresh $400 million funding round at a valuation of $3.3 billion. The Series G investment included $300 million in equity funding led by Alpha Wave Global and $100 million in debt financing backed by financial institutions. It was CARS24's third funding in just one year, totalling $840 million in equity investment during this period.
Founded in 2015, CARS24 claims to have a 90% market share in the online used car segment, with the company growing 100% in CY21 as compared to CY20. International markets are contributing 20% to its total revenues. And, the company is also planning to come up with an IPO in the next two years.
The recent layoffs in several companies in India seem to point toward a negative trend in the startup industry. Edtech unicorn Vedantu on Wednesday laid off 424 employees, around 7% of its total workforce, on expectations of slower growth in the coming quarters.
Before that, it was reported that more than 220 employees in ed-tech major Byju's-owned WhiteHat Jr resigned from the company as they were asked to join office after two years of working from home.
Ed-tech startup Unacademy laid off 600 employees, including on-roll staff, contractual staff and educators in March-April. The sacked staff comprised less than 10% of the workforce of the Bengaluru-based company. Additionally, furniture startup Furlenco and e-commerce platform Meesho have also seen layoffs in recent weeks.