1 min read.Updated: 01 Apr 2020, 07:25 PM ISTSalman SH
Bounce says taking the pay cuts across the company ensures that no jobs are lost irrespective of the economic situation
The start-up is looking at reinstating the original salary as soon as the pandemic situation improves
Scooter rental platform Bounce on Wednesday said that it will temporarily cut salaries of all employees, across the organization, given the uncertainty for businesses and start-ups in the country that has been caused by the virus outbreak.
Bounce founders, Vivekananda Hallekere, Varun Agni and Anil Giriraj have announced a 100% pay cut in their salaries, while the rest of staff have agreed to forgo 20-60% of their compensation.
“Taking these pay cuts across the company ensures that no jobs are lost irrespective of the economic situation, and the company improves its runway to over 30 months. In lieu of the interim salary cut, employees will get ESOPS (employee stock ownership programs) so that everyone benefits from future upside when the going gets better again," Bounce said in a statement.
Bounce said it is looking at reinstating the original salary as soon as the pandemic situation improves. The startup said that the entire due salary will be paid back in full to employees as soon as the macro-economic indicators return to normalcy.
The on-going global pandemic is expected to have a negative impact on the global economy. Bounce expects that this may also slow down the investment scenario as well as affect operational cash flow in the future.
Bounce is one of the well-funded startups in the mobility space. The company had raised over $105 million in January 2020, led by Accel Partners & Facebook Co-founder Eduardo Saverin's B Capital Group.
A Mint report in March said that urban mobility start-ups such as Bounce, that operate both two- and four-wheeler fleets are in for a rough ride, with the covid-19 outbreak and the consequent lockdown announced in India.
Bounce and Yulu had both seen a dip in daily rides since March. While Uber and Ola earlier suspended services temporarily across India. Uber has temporarily suspended operations in 32 cities, it said last month. Ola said that it will operate only a skeletal fleet to help people in emergency situations.
Last month, Sequoia-backed Bounce and Ola-backed VOGO had both let go of employees across technology and customer care operations after many temporary contracts expired and as ridership dipped. A VOGO spokesperson confirmed the layoffs were because of contractual workers leaving.
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