When a hostage crisis ruffled feathers at TinyOwl

India’s food start-up space, quite hot and attracting keen investors until recently, seems to be heading for a difficult phase. The recent crisis at food-ordering start-up TinyOwl, which sacked some 52 employees at its Gurgaon office and saw its co-founder Gaurav Choudhary being taken hostage by disgruntled employees at the Pune office, could be an indication of this.

It was earlier reported that TinyOwl on Tuesday laid off around 100 employees across India, 52 of them from Gurgaon alone. But, things took an ugly turn on Wednesday, when employees who were laid off a day before, as well as those sacked in August, detained co-founder Gaurav Choudhary in TinyOwl’s Pune office.

Medianama  quoted an employee as asking: “They say the full and final settlement (F&F) will be sent within 45 days, but how do we trust them when they haven’t paid old employees.” He was further reported to have said: “We have a mail from the human resource department saying that F&Fs won’t always get settled within 45 days. Some of the employees present at the office are from the previous round of layoffs which took place on August 31 this year.”

According to the report, employees were told that the Pune operations would be shut down and employees needed to contact the Mumbai office for settlements. 

Medianama quoted Choudhary as saying that TinyOwl could have sacked people over email but decided to send one co-founder to each city, in order to do this in a more “human” way.

Some local politicians were also reported to have entered the TinyOwl office; they asked Choudhary to give the number of the person in TinyOwl authorised to make decisions. The number, though, was switched off. The police then came with a bigger squad and, after some negotiations, a sheet of paper with signatures of all employees present was handed to Choudhary, along with the list of their terms and conditions.

The matters cooled only after a visit to the police station, where the police recorded statements from Choudhary and a few accompanying employees. Both Choudhary and employees spent the night in the TinyOwl office.

Amid all the crisis the company has been facing lately, one is impelled to wonder what happened to the investments it received. As report by Business Standard on Thursday, questions were raised about the recent round of funding, in which it raised Rs 50 crore from its current investors. Though there was no clear answer forthcoming, the company had said it would use the funds to automate operations and pay salaries.

The report pointed out that the employees spent heavily on customer acquisition alone — 100-200 times their returns. TinyOwl planned to bring down the number of employees to 500 from 650. Several employees from the company's offices across India, meanwhile, set conditions demanding double the notice-period gross pay; besides a relieving letter and final payment as soon as possible. They also sought petrol allowances, salaries till the date they signed the papers and assistance in finding jobs.