Udaan will lay off about 120 employees, or 6 per cent of its workforce of 1,600, by the end of December, said a source about India’s largest business-to-business (B2B) e-commerce firm that is focusing on profitability amid tight liquidity and a global economic slowdown.
The layoffs are related to the company merging its food and non-food division units, said the source. Last November, Udaan laid off 350 employees across department functions in a move to drive cost efficiency. Before that in June 2022, the firm sacked 180 employees.
Udaan said it has made significant progress in becoming profitable and makes interventions to its business for that. “However, these interventions have also resulted in some redundancies in the system,” said a spokesperson for the company about the latest layoffs. “As a responsible organisation, we are working towards providing all requisite support to the impacted employees which includes medical insurance, compensation package as per company policy and placement assistance.”
Udaan recently raised $340 million in financing, signaling a slow return of deal momentum. The Series E financing was led by M&G Plc and it was attended by existing equity investors Lightspeed Venture Partners and DST Global.
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The Bengaluru-based company didn’t say if the funding had changed its valuation of $3.1 billion. Udaan said its business is fully funded and on course to achieve its objective of becoming profitable and being public market-ready in the next 12–18 months.
Udaan said that in two years it has made consistent progress in its sustainability agenda, with eight consecutive quarters of improving profitability.
Udaan’s gross revenue (GMV) decreased by 43.1 per cent to Rs 5,629 crore in Financial Year 2022-23 (FY23) from Rs 9,900 crore in FY22, according to media platform Entrackr. The sale of traded goods on the online platform was the primary revenue driver for the company, accounting for 96 per cent of the total gross merchandise value. This income shrank by 43.7 per cent to Rs 5,408 crore in FY23. Udaan’s losses contracted 33.7 per cent to Rs 2,076 crore in FY23 from Rs 3,132 crore in FY22, according to Entrackr.
Over the last 12 months, Udaan said it has seen steady validation of its multi-category cluster-anchored business strategy. The company is reinforcing the strategy with a regional cluster-led operating organisation that enables strong execution capabilities.