India’s Meesho cuts 251 jobs
Meesho has cut 15% of its workforce, or 251 roles, as the Indian social commerce startup pares its expenses to improve its financial health.
This is the second round of job cuts at Meesho, which eliminated about 150 roles 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 “work with a leaner organizational structure to achieve sustained profitability.”
“We are committed to ensuring all those impacted have our full support and will be provided a separation package that includes a one-time severance payment of 2.5 to 9 months (depending on tenor and designation), continued insurance benefits, job placement support and accelerated vesting of ESOPs. We remain grateful for their contributions in building Meesho,” a Meesho spokesperson said in a statement.
The job cuts follows Meesho aggressively trimming its cash burn in the last year. The startup is “nearing zero cash burn” and is targeting to achieve EBIDTA breakeven in 2023, its leadership team recently told brokerage firm Jefferies.
The seven-year-old e-commerce startup, whose sellers are predominantly based in smaller cities, drove a GMV of $4.5 billion in 2022, a nine-fold growth over a year, the startup told Jefferies.
Meesho is attempting to serve an audience that is too sensitive to price and don’t mind unbranded products. This value proposition has “resonated well with the low to mid income customer cohorts from tier 2+ markets, forming the bulk of the consuming class in India although there is traction seen in metro/tier-1 as well,” Jefferies wrote.
Compared to traditional platforms, where the average order value from a customer is about 1,000 Indian rupees, or $12.2, Meesho’s AOV stands below 350 Indian rupees, according to Jefferies and people familiar with the matter.
More to follow.