Indian startups are facing layoffs from all sides. The online market for used cars Cars24 released 600 employees on Thursday, adding to the list of high-profile layoffs of “unicorns” amid money cuts and the need to increase runways.
A spokesman for Cars24 said in a statement: “It’s a common thing – performance-related outputs happen every year.” Cars24 employed about 9,000 people before the layoffs. 6.6% of Cars24 employees encountered an ax.
It is believed that this step was a response to the limited funding that prevails throughout the startup ecosystem. Since obtaining funding was not easy, and Cars24 has publicly stated its intention to become a publicly traded entity in the next 18-24 months, it is not so difficult to assume that these layoffs were made to cut costs wherever possible.
🚨 EXCLUSIVE: used car dealer Cars24 fired about 600 employees
-> Cars24 fired employees mostly from lower positions in the divisions
-> Sources said that the layoffs were due to the fact that the startup is trying to further automate operations and reduce costs.
– Debarghiawrites (@debarghyawrites) May 19, 2022
Contrary to popular belief, Cars24 is expanding to Australia, the UAE and other countries. The company recently raised $ 400 million, spread over several investors, in the G-Series round, $ 300 million of which was raised as equity. The round put the firm’s value at a solid $ 3.3 billion. Over the past eight months, Cars24 has raised $ 850 million from investors such as SoftBank, Tencent and DST Global.
Cars24, unlike its rivals CarDekho and Spinny, has made no profit since its founding in 2015. Fintrackr’s analysis showed that these companies suffered losses in the range of 110-340 crores. The market has contributed to Cars24’s idea, as used cars have become a popular option since the economy began to be hit by global events such as COVID-19, the subsequent chip shortage and the war between Russia and Ukraine.
Cars24 joins other Indian startups such as Unacademy, Meesho, Vedantu and Furlenco, which have recently had significant layoffs due to bottlenecks in funding.