integrate the grocery vertical into its main app, leading to talks of redundancies within the firm.
A Meesho spokesperson confirmed the layoffs to ET and said, “ About 150 full time employees will be impacted by the restructuring of Meesho Superstore which is aimed at bringing in efficiencies. The company is offering severance packages and outplacement assistance to help those impacted secure new opportunities outside the company.”
Sources close to the development told ET that around 400 employees will be impacted by the company’s downsizing move. Meesho, however, denied this and said only 150 of its staff were being asked to go.
“ The redundancies do not impact any positions at the core Meesho marketplace business, where we continue to hire and grow talent,” a blogpost from Meesho said on Monday.
The company said on April 6 that its grocery service, currently available in six cities, would be scaled up to 12 cities by the end of the year.
Superstore has the highest number of employees in the company with a headcount of more than 500, said a source within Meesho. The roles that have been affected are city level managers, product, design and executives who worked on its user interface.
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An employee who was asked to go told ET on the condition of anonymity that the company said it was pivoting its grocery business and would move to a different model that won’t rely on city level executives. The person said none of the employees had been given a prior notice about their terminations.
The layoffs are an attempt to reduce its cash burn, according to sources in the know.
ET reported in September that
Meesho was burning around $20-25 million per month amid intense competition in the online retail market. The cash burn inched up to as much as $50 million per month earlier this year, sources in the know said.
Superstore began as a pilot in Karnataka last year and was mainly targeted at tier-II cities and customers with an emphasis on lower prices than the convenience of faster delivery, which quick commerce players like Swiggy’s Instamart, Zepto and others have been focusing on.
Meesho competes with the likes of Dealshare, Citymall and Flipkart’s Shopsy, which target users through community buying models.
The company has been in talks to raise fresh capital after having mopped up $570 million in September led by Fidelity.
Backed by SoftBank Vision Fund and Prosus (earlier Naspers), among others, it has been in the market to raise new capital, but sources said it was yet to close the fundraise.
Meesho, like many other well-funded startups, is looking to prune cash burn after a year of eye-popping funding and skyrocketing valuations snagged by Indian new age companies.
On March 26, ET reported that furniture rental company
Furlenco let go of 180 employees and on April 7, we reported that
Unacademy had laid off over 1,000 employees.
