India’s Meesho to cut 251 jobs

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By Webdesk

Meesho has cut 15% of its workforce or 251 jobs, while the Indian social commerce startup is cutting spending to improve its financial health.

This is the second round of layoffs at Meesho, with around 150 positions lost a year ago. The Bengaluru-headquartered startup, backed by Fidelity, Prosus, SoftBank, Sequoia India and Meta, said in a statement that it is looking to “operate with a leaner organizational structure to achieve sustainable profitability”.

“We are committed to ensuring that all involved receive our full support and that they receive a divorce package that includes a one-off severance payment of 2.5 to 9 months (depending on term and destination), ongoing insurance benefits, support in job placement and accelerated fortress of ESOPs. We remain grateful to them for their contributions to building Meesho,” a Meesho spokesperson said in a statement.

The job cuts follow Meesho’s aggressive reduction in cash burn over the past year. The startup is “near zero cash burn” and aims to reach EBIDTA break-even by 2023, the leadership team recently told brokerage firm Jefferies.

The seven-year-old e-commerce startup, whose sellers are mostly based in smaller cities, will achieve a GMV of $4.5 billion by 2022, a ninefold year-over-year growth, the startup told Jefferies.

Meesho tries to serve an audience that is too price sensitive and has no objection to unbranded products. This value proposition “resonated well with the low-to-mid-income customer cohorts from tier 2+ markets, which make up the majority of the consuming class in India, although there is traction in metro/tier 1 as well,” Jefferies wrote.

Compared to traditional platforms, where a customer’s average order value is around 1,000 Indian rupees or $12.2, Meesho’s AOV is below 350 Indian rupees, according to Jefferies and people familiar with the matter.

More to follow.

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