E-commerce unicorn Meesho has slashed 15 per cent of its workforce, impacting 251 employees at the company.
In an e-mail to employees, Meesho’s Founder and CEO, Vidit Aatrey, said the company made judgement errors in over-hiring ahead of the curve, and now has to align its people costs to new business projections as the macro climate has changed from the 2020-2022 period. Businessline has seen a copy of thie email.
Confirming the development, a Meesho spokesperson said, “We have taken a difficult decision to part ways with 251 Meeshoites constituting 15 per cent of the employee base, as we look to work with a leaner organisational structure to achieve sustained profitability. We are committed to ensuring all those impacted have our full support and will be provided a separation package that includes a one-time severance payment of 2.5 to 9 months (depending on tenor and designation), continued insurance benefits, job placement support and accelerated vesting of ESOPs. We remain grateful for their contribution in building Meesho.”
“We grew by 10X from 2020 to 2022, helped by Covid tailwinds and aggressive investments. Even as we tracked to our plans, the macro climate undeniably and considerably changed. As a result, we have had to accelerate our timeline to profitability as part of Project Redbull, while readjusting our GMV growth goals to 30 per cent YoY. While our cash reserves offer a buffer in these harsh circumstances, we need to stay prudent on the cost front,” Aatrey said in the email.
He added that Meesho’s leaders made judgement errors in over-hiring ahead of the curve and could have run our organisation structure in a more effective and lean manner overall. “We are now faced with the hard truth of aligning our people costs with new projections for our business. We should have done better here,” he said.
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Aatrey reiterated that the decision around who is impacted has nothing to do with performance, and only to do with our business reality. For the impacted employees, Meesho has announced full pay for notice period and one additional month, along with a tenure-based payment of 15 days’ pay for every completed year of service, rounded up to the nearest year.
Further, for all impacted ESOP holders, the company has dropped the 1-year vesting cliff so that all departing employees remain shareholders in the company. All ESOPs due to vest by August 5, 2023, will accelerate and vest immediately. Also, if Meesho does a buyback event till May 4, 2024, exiting employees will be treated at par with full-time, current employees.
Meesho is also extending family insurance coverage up to March 31, 2024, for the exiting employees and relocation reimbursement. The company has also announced placement support for the impacted employees.
“I understand this is bigger and more frustrating than any change we have braved together. For those who are leaving: I say thank you and that I truly am sorry. You were the strength that moved mountains in our mission of democratising e-commerce for everyone and you made Meesho Meesho. While you leave a big gap behind, I am certain you will succeed in all your endeavours,” Aatrey added.
Meesho laid off 150 employees from its grocery vertical Meesho SuperStore (formerly Farmiso) in April 2022, citingan attempt to drive efficiency.