Startup Layoffs: ReshaMandi, headquartered in Bengaluru and specialising in silk yarn products, has reportedly downsised its workforce significantly, laying off 80 per cent of its employees after failing to secure Series B funding. The company has been gradually reducing its operations since the previous year, starting with 500 employees in January 2023, which decreased to approximately 100 by end of the year. In addition, reports indicate that nearly 300 former employees are yet to receive their final dues and salaries.
According to a report by Inc42, ReshaMandi’s employees attributed the company’s rapid expansion into various sectors following a fundraising round in October 2021 as the reason for this extreme step taken by the firm. They stated, “The company fell victim to the growth-at-all-costs mindset, which drove it to inflate revenues in FY23 and FY22. It’s very likely that Temasek and other investors caught wind of the allegations now being raised by employees on social media and in their conversations with us.”
Founded in 2020, ReshaMandi raised over $40 million in equity funding from investors such as Creation Investments, Omnivore, Venture Catalysts, and others. Additionally, the company secured nearly Rs 300 crore in debt from venture debt investors and lenders.
Subsequently, the company encountered significant financial difficulties, prompting a series of employee layoffs beginning in the month of June 2023. During this period, employees were allegedly given the option to continue working without receiving salaries for three months before ultimately being terminated from their positions.
Meanwhile, during the initial six months of 2024, a staggering number of layoffs affected over 98,000 workers across a spectrum of more than 330 companies worldwide, as per the reports. This wave of downsizing has sparked a surge in hiring within the technology sector. Notable among the 333 layoff affected businesses are industry giants such as Apple, Tesla, Google, Microsoft, and Meta.
Also Read: Microsoft Layoffs: Firm Fires Nearly 1,500 Employees From Different Departments