In a surprise move, Udaan, the business-to-business (B2B) e-commerce unicorn, decided to make significant cuts in human capital by laying off 100 to 120 employees which constitutes nearly 10% of its total staff. The move comes following the firm’s recent funding success in which it secured a whopping $340 million in a funding round led by the UK firm M&G Prudential.
The funding was intended to strengthen the firm’s supply chain and empower vendor partnerships. According to a report from Moneycontrol, the cause of the layoff is said to be due to a fundamental shift in the firm’s operational strategy.
Majority of these job cuts hit the Udaan’s go-to-market (GTM) team, the folks responsible for managing the firm’s relationships with sellers. The report also indicated that these surprise layoffs are tied to Udaan’s plan to tidy up its operations that began in September. The measures to ‘tidy up ‘ include the integration of its ‘Essentials’ and ‘Discretionary’ verticals which are spread over categories such as fast-moving consumer goods, electronic goods, lifestyle and many more.
According to the same report, a spokesperson for the firm confirmed the layoffs and stated that interventions to construct a lucrative business model led to some redundancies within the organisation and as a result caused the firm to take a step towards laying off employees from its GTM team. It is a strategy to compensate for the other adversities faced by the firm.
Even with a recent influx of funds, Udaan is reportedly experiencing a valuation dip, with its valuation falling well below $2 billion. This plunge marks a significant downturn from its last equity round in 2021 where it proudly stood at a valuation of $3.2 billion. To compensate for its reeling losses, the company has strategically scaled back its operations, tackling liquidy challenges and issues head-on and zeroing in on achieving profitability. The difficulties at hand were compounded when Udaan’s founders, former Flipkart executives Amod Malviya and Sujeet Kumar, shifted away from the firm’s daily operations.
Read more at thetechportal.com
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