Home >Companies >Start-ups >Job losses mount in small startups, unicorns

Small startups and well-funded unicorns in various sectors such as online food delivery, hospitality and tourism, and mobility, are downsizing or streamlining operations to cut costs as demand remains muted due to the coronavirus outbreak and the ensuing lockdown to contain its spread.

Several startups laid off or furloughed employees and contract staff in April and May, besides imposing salary cuts to save cash, with revenues taking a hit. Travel and hospitality startups have been hit the most. Bengaluru-based travel startup Flynote has laid off most of its 130-strong workforce citing fund shortage.

Hospitality unicorn Oyo, which has been laying off people since late 2019, announced salary cuts, besides furloughing staff in late April, to save cash after its revenues plunged amid the pandemic outbreak. The moves to cut costs are in line with steps taken by hospitality firms across the world.

Foodtech startup Dineout and online real estate platform Magicbricks have cut employee count across business roles, said three people aware of the development.

Some employees of Magicbricks were asked to resign in writing without severance pay and also serve a 30-day notice period, said a person, requesting anonymity. Magicbricks laid off around 250 employees in May, he added.

The lay-offs at Dineout were based on performance reviews, said another person, also requesting anonymity. “There were a few lay-offs in the company, but these were purely on performance basis."

Mint was not able to verify the number of employees affected by Dineout’s move.

A third-person aware of Dineout and Magicbricks’ business said that both firms have been reducing expenses and rationalizing costs since early May. Both are owned and managed by internet holding firm Times Internet.

Dineout CEO Ankit Mehrotra did not respond to email queries. A Magicbricks spokesperson did not respond to calls and email queries. Last week, online food delivery company Zomato said it will lay off 13% of its workforce. Deepinder Goyal, founder and CEO, told employees in a note that it will initiate company-wide temporary pay cuts as it tries to preserve cash in an uncertain business environment.

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