After shutting down operations in 9 cities in January, online grocery delivery startup Grofers is now laying-off 10% of its work-force while retracting job offers given to fresh graduates, reports Livemint. The company’s Human Resource head notified its employees through an email that most lay-offs would take place in the customer support and content teams; exiting employees will receive a one-month severance package, the report added.
The company cited “general slowdown in activity” within the grocery delivery business as one of the reason behind the lay-offs, in the email circulated among the employees. MediaNama contacted Sharad Harjai, Assistant Vice President, Marketing at Grofers for a comment, however Harjai refused to comment on the story.
“The primary driver of this decision is our changing growth trajectory. We grew at an insane pace last year but given that as of April this year, we have effectively reduced marketing spend next to nothing. We don’t foresee the same growth rates to continue,” said the email, which was reviewed by Mint.
Job-offers revoked: The company has retracted 67 job offers in total issued to students from National Institute of Technology, Birla Institute of Technology and Science and Indian School of Mines in, according to Mint. Earlier on Tuesday, the company revoked job-offers given to 8 students from MNNIT, just 2 days before their joining dates, as indicated by YourStory.
Yesterday, Grofers said in a blog post that it has been making some strategic changes within the company, which is intended to benefit customers. The positions for which job offers were issued turned out to be “redundant” after the changes, added Grofers in the post, while apologizing for the move.
“However, these (strategic) changes have made the new roles redundant and therefore, we are no longer able to continue with the offers we made a few months back” Grofers said in the post
Services shutdown in 9 cities: In January, Grofers had shut down its services in 9 cities citing low acceptance. The company had expanded to these Tier II cities, including Ludhiana, Bhopal, Kochi, Coimbatore and Visakhapatnam in September 2015. Grofers now operates in 17 cities.
Grofers funding: In November, Grofers raised $120 million in a round of funding from SoftBank, Russian entrepreneur Yuri Milner, with participation from existing investors Tiger Global and Sequoia Capital. Note that the company raised funding worth $35 million from Tiger Global Management and Sequoia Capital India in April, less than two months after it had raised series A funding of $10 million. It had also raised an undisclosed amount in seed funding from Sequoia and Zomato founder Deepinder Goyal.
Acquisitions: In September, Grofers acquired the B2B logistics service provider Townrush for an undisclosed amount. The acquisition was essentially an acqui-hire with Townrush ceasing to exist as an independent company. Around the same time, Grofers also acqui-hired SpoonJoy for an undisclosed amount. In April, it acquired mobile grocery My Green Box. At the time, the company said that 60% of its business came from the grocery vertical.
Recent shutdowns in online grocery delivery:
–In April, online grocery delivery service PepperTap, which raised $51.2 million in funding since inception, had shut down operations across the country, and planned to pivot its business into logistics.
– Last month, Ola shut down its food and grocery delivery businesses Ola Cafe (launched in March 2015) and Ola Store.
– In February, Flipkart shut down its grocery delivery service Nearby five months after its launch.
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