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MUMBAI : Cars24 Services Ltd has laid off 600 employees, a person familiar with the development said, even as the used cars platform pushes ahead with its international expansion plans. All of the employees asked to go were from India and after their annual appraisals, the person said on condition of anonymity.

“This is business-as-usual performance-linked exits that happen every year," a Cars24 spokesperson said, declining to call it a “layoff".

The company, which is backed by SoftBank and Alpha Wave Ventures, would move closer towards profitability following the reduction in staff, said a second person aware of the details.

Most of the staff asked to go were in junior positions, the first person cited above said. “It is not because of (lack of) funds. We are also expanding globally," the person said. News website Inc42 first reported about the layoffs.

Before this development, Cars24, which was founded in 2015 to help consumers buy, sell, and finance used cars, had close to 9,000 employees.

The company raised $300 million in equity and an additional $100 million in December 2021 at a valuation of about $3.3 billion.

At the time, Cars24 said it would use the proceeds from the latest fundraise to fuel its international expansion and ramp up its refurbishment labs, while also accelerating on growth to gain market share.

In 2021, the company entered international markets such as Australia, the UAE and Thailand. At the time, the company also announced plans to expand its presence across 6-7 countries in 2022. It was also eyeing expansion in Saudi Arabia, Indonesia and Malaysia.

Co-founder Gajendra Jangid said in an interview last December that international markets comprised 20% of the company’s overall revenues, owing to higher ticket sizes. Jangid said the company’s annual recurring run rate stood at $1 billion in December 2021.

Cars24 reported consolidated net sales of 2754.9 crore in fiscal year 2020-21, down from 3,023.3 crore in 2019-20, which in turn was almost double its FY19 net sales of 1,654.61 crore. Alongside, it has trimmed its losses over the years.

The company reported a loss of 191.5 crore in FY21, narrower than 291.6 crore in FY20 and 325.6 crore in FY19.

The used-car platform joins multiple startups across sectors that have recently asked employees to go, potentially in a bid to conserve capital in a difficult funding environment.

“There are inflationary pressures currently, and given some of the uncertainty, there is a little bit of prudence at play with some of the organizations, not all. They probably have an internal messaging to be as lean as possible and focus on less cash burn," said Rituparna Chakraborty, co-founder, and executive director at TeamLease Services, that provides staffing solutions to businesses including startups.

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