Startup Layoffs: Bengaluru-Based ReshaMandi Lays Off 80% of Its Workforce Over Struggling To Secure Series B Funding
ReshaMandi, a Bengaluru-based startup laid off around 80% of its employees due to not securing Series B funding. The ReshaMandi layoffs began last year in June when the company reduced employees to 100 out of 500 of total workforce.
Bengaluru, June 24: The wave of layoffs has hit Indian startups, as a Bengaluru-based B2B and one-stop sourcing platform has announced cut 80% of its total workforce. The ReshaMandi layoffs has been ongoing for over a year as, previously, the company let hundreds of employees go to downsize their operations. The new reports highlights the struggles of startups when they cannot secure the required funding and resort to layoffs.
According to a report published by Hindustan Times, ReshaMandi, founded in 2020, laid off 80% of its workforce after failing to secure Series B funding. ReshaMandi layoffs have been ongoing since 2023, when the company announced workforce reduction. The report mentioned that in January 2023, this B2B company, known for selling silk yarn products, had around 500 employees, which were reduced to around 100 at the end of the year. Paytm Layoffs, Termination: Employees File Complaint With Ministry of Labour for ‘Unlawful Treatment’, Indian National Congress’ AIPC Says Will Fight for Them.
According to the report, 300 of the laid-off employees were not given their final dues and salaries. In October 2021, ReshaMandi reportedly raised funds for rapid expansion across different areas. However, the report mentioned that the company's revenue inflated in FY22 and FY23 due to adopting the "grow-at-all-cost" mindset. Further, the report highlighted that the ReshaMandi investors, such as Temasek and others, knew about the employees alleging the company on social media. Intel Layoffs: Leading Chipmaker Cutting ‘Undisclosed’ Numbers of Jobs To Reduce Costs and Improve Margins.
ReshaMandi was successful in raising more than $40 million in equity funding from the investors. These investors included Omnivore, Creation Investments, Venture Catalysts and others. Besides, the B2B platform acquired a debt of Rs 300 crore from lenders and debt investors. However, due to the financial challenges, the company resorted to layoffs. The ReshaMandi layoffs began in June 2023 as the company asked its employees to work without salaries for three months before they were fired. Despite the promising start and funding, ReshaMandi laid off 80% of its employees due to the failure to get Series B funding.
(The above story first appeared on LatestLY on Jun 24, 2024 12:12 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).