Tricky times in store for Askme

Askme has been trying to rationalise its costs & asked 650 to resign 3 weeks ago

The storm is still to pass for Askme as the listings company, which pivoted to an all-purpose e-commerce firm, admitted it was facing difficulties in raising funds.

In February, Askme had told Business Standard it was close to raising $200 million (Rs 1,350 crore) from investors, external and internal, at a valuation of $1 billion. Askme was aiming to close the latest round by April, but the company admitted it would take at least 90 days.

Askme has been trying to rationalise its costs and asked 650 people to resign three weeks ago. "We had hired people in our effort to ramp up services. We decided to let them go once they were not needed," said Manav Sethi, group chief marketing officer, Askme. He said the employee strength had ballooned to 3,500 people.

The latest round of staff rationalisation, he said, was to lighten the strain on the balance sheet as well as reduce the burden on the management.

"At the end of every financial year we have to analyse our skills and functions… and here we realised we needed to rationalise," he said.

The company, which had a majority shareholder in Astro, had grown too soon, Sethi admitted. Askme denied the delay in investment had anything to do with unpaid dues to vendors. Some of them have complained their dues are pending for over three weeks.

Sethi said some payments might have been delayed because partnerships with some vendors had been terminated and the deals were being examined. "We have almost all but shut out the outgoing call centre. We had given them a lead generation programme and we are looking at that before settling their dues," he said.

Sources said to cut costs further the company might be forced to trim the fat again and a shortlist might be sent to HR managers over the next few weeks. Askme, however, denied any such move was afoot.

But if the latest round of rationalisation does go through, Askme will be down by 1,000 people in about a month.