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Meesho saves 15 percent of its workforce to reduce costs and achieve profitability


E-commerce company Meesho has laid off 251 employees who make up 15 percent of its workforce to cut costs and as part of its efforts to achieve profitability, a senior company official said on Friday.

Founder and CEO of Meesho Vidit Aatrey in an email to employees who were informed of the decision announced that all affected employees will receive an additional monthly bonus after the notice period in addition to the ESOP regardless of their time with the company.

“We are working to reduce the size of Meesho’s workforce by 15 percent, affecting 251 employees,” Aatrey said in an internal email.

He said the company grew 10 times from 2020 to 2022 with the help of Covid tailwinds and aggressive investments.

“Even as we tracked our plans, the overall climate undeniably and dramatically changed. As a result, we had to accelerate our schedule to profitability as part of Project Redbull, while readjusting our GMV growth targets to 30 percent year-over-year.

“While our cash reserves protect us well from these harsh conditions, we need to be very careful with the cost,” Atri said.

A recent report from Jefferies said that Meesho is already positive contribution margin (pre-marketing and indirect spend) and that the company is close to zero cash burn and is on track to break even EBITDA this year.

When contacted, a company spokesperson said: “We have made the difficult decision to part with the 251 Meeshoites that make up 15 percent of the employee base, as we look to operate with a leaner organizational structure for sustainable profitability.” The spokesperson said the company is committed to ensuring all affected receive its full support and a severance package will be made available that includes a one-time severance payment from 2.5 to 9 months (depending on term and appointment), ongoing insurance benefits, job placement support and accelerated eligibility for ESOPs.

“We remain grateful for their contributions to building Meesho,” the spokesperson said.

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Joanna Swanson

Joanna Swanson is Europe correspondent at the Thomson Reuters Foundation based in Brussels covering politics, culture, business, climate change, society, economies and inclusive tech. With specific focus in breaking news, she has covered some of the world's most significant stories.