Udaan fires 180 employees; 4% of its workforce

Business-to-business e-commerce major Udaan has reportedly laid off about 180 employees, around 4% of its total workforce of 4,000 employees, across various departments.

The layoffs are seen as part of the company's renewed focus on making its business model “stronger, efficient, agile and customer-centric”. Udaan aims to launch its initial public offering (IPO) in the next 18-24 months.

Right now, "efficiency, better service, quality products and customer experience" are the main priorities for it, says the startup. The Bengaluru-headquartered company, however, has not divulged details about the exact number of fired employees.

With these layoffs, Udaan has joined a series of startups in India, including CARS24, Vedantu, Ola, Unacademy, and White Hat Jr, which resorted to job cuts amid weak funding prospects, rising costs and poor growth projections in near future. As per an estimate, around 3,500-4,000 employees have been fired by startups since the beginning of the year 2022.

Udaan, a marketplace that connects small retailers with wholesalers and traders across categories such as lifestyle, electronics, home and kitchen, fruits and vegetables, was founded in 2016 by Sujeet Kumar, Vaibhav Gupta and Amod Malviya. They were also part of the founding team of e-comm giant Flipkart. The country’s biggest eB2B platform claims to have an estimated market share of 80%, distributing 0.5-million products across 2,500 brands to 3 million of the estimated 12 million distribution outlets in 900 towns.

According to an Udaan spokesperson, it believes in efficiency to achieve profitable growth but this strategy has left many roles redundant. As the market evolves, Udaan continues to "tweak" its business model to make it "stronger, more efficient, customer-centric and agile", says the company.

"We have taken various steps to enhance efficiency, refine our cost structure and grow faster in our journey to achieve strong unit economics. However, the efficiency enhancement exercise has also resulted in certain redundancies in the system, with some roles no longer required."

The spokesperson says all possible support is being provided to the impacted employees. "We are working towards providing all required support to the impacted employees, which include medical insurance for self and family (based on the existing coverage plan), compensation package as per company policy and providing placements assistance," the company adds.

The recent layoffs in top startups in India seem to point toward a negative trend in the industry. Edtech unicorn Vedantu in May 2022 laid off 424 employees, around 7% of its total workforce, on slower growth prospects in the coming quarters. Used car marketplace CARS24 also laid off over 600 employees in May, in what the company called "business as usual". The fired employees were around 6% of its total workforce of 9,000 employees. Before that, 220 employees in ed-tech major Byju's-owned WhiteHat Jr resigned as they were asked to join the office after two years of working from home. Ed-tech startup Unacademy also laid off 600 employees, less than 10% of its workforce.