Meesho, the Indian e-commerce startup, has laid off 251 employees, or around 15% of its current workforce, as part of a cost-cutting exercise. This is the third round of layoffs for Meesho in just over a year and takes the total number of employees laid off to more than 700.
The decision was communicated to the employees in an email by Meesho’s co-founder and CEO Vidit Aatrey on May 5. Aatrey attributed the decision to over-hiring and the need to run a leaner and more effective organizational structure, especially in the present macroeconomic environment that has expedited the startup’s timeline to profitability.
A Meesho spokesperson confirmed the layoffs and stated that the exiting employees will receive a separation package that includes a one-time payment of 2.5-9 months, depending on their tenure and designation, insurance benefits, job placement support, and accelerated vesting of ESOPs by one year. The spokesperson also mentioned that the company’s new GMV growth target is 30% year-on-year.
Meesho was founded in 2015 and has raised more than $1 billion in funding from investors such as SoftBank, Prosus, Meta, Fidelity Management, and B Capital Group, among others. The startup is currently valued at $4.9 billion. Meesho’s net losses widened by more than six times in FY22, reaching INR 3,247.8 crore on a standalone basis during the period under review, while its total revenue increased fourfold to INR 3,359.4 crore in FY22 from INR 838.6 crore in FY21.
The Indian startup ecosystem has been severely impacted by the funding drought since the start of the COVID-19 pandemic, resulting in widespread layoffs within the ecosystem. According to Inc42’s Indian Startup Layoff Tracker, Indian startups have fired nearly 26,000 employees since the beginning of 2022.
