Yepme delays salaries, lays off staff. Is it going the AskMe way?

It started outsourcing warehousing quality audits to vendors in India & US, reports Tech in Asia

Last month, the Gurgaon-based Yepme quietly shut down two of its units – warehousing and quality control – letting go of close to 30 employees. But founder Vivek Gaur insists that the move was towards the company’s growth, and not “because we have no cash.” (Hat tip toTechCircle, which reported about the layoffs first.)

Apart from names that rhyme, Yepme and Askme seem to have a similar trajectory towards disaster.

Yepme had to trim its workforce after it started outsourcing warehousing and quality audits to third-party vendors in India and the US.

And yet, according to the five employees we spoke to, Yepme has not formally laid off the team members. “They were told by team leaders verbally. They have been asking for a termination letter, but that hasn’t happened,” one of the existing employees of Yepme said.

This is a situation starkly similar to the events that unfolded at AskMe. Its top management kept a lid on the business falling apart, for close to a year. It was never formally announced, but the company was disintegrating team by team. The management went incommunicado, leaving scores of employees without a job and months of salary.

Why would a company do that? If a company terminates employees, they are obligated to pay a bulk sum of money as severance packages, as per employment contracts.

Moreover, at least five of the company’s employees we spoke to allege that Yepme management repeatedly delayed salaries, since October. The Yepme founder did not deny it, but said that salaries are delayed only for the month of January.

Yepme’s losses have been steadily mounting, despite the fact that Yepme earns higher margins of 40-60 per cent selling private labels. Online marketplaces such as Flipkart and Amazon earn margins of about 30-40 per cent.

This is an excerpt from Tech in Asia. You can read the full article here