The retrenchment has affected 45% of its technology and product teams, three people familiar with the matter told ET. A total of 36 staffers, including software engineering developers and directors from a team of 80 have been asked to leave the company, these sources said.
“We are taking all the necessary steps to ensure we provide employees with a smooth transition in the form of an assistance package, extended medical insurance and necessary outplacement services wherever possible within our network,” a company spokesperson told ET.
Founded in 2015 by Ramakant Sharma and Anuj Srivastava, Livspace, which is valued at $1.2 billion, provides a three-sided marketplace and design automation platform that connects homeowners, certified designers and vendors.
Its investors include private equity major KKR, Ingka Group Investments, part of IKEA parent company Ingka Group, Jungle Ventures, Venturi Partners, Peugeot Investments, among others. Till date it has raised $450 million from investors.
Livspace employs a total of 5,000 employees. It is unclear if the layoffs included non-tech employees.
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“There is a lot of pressure on them to deliver on profitability and hence the layoffs… Any work that is not involving profitability is now being taken out,” one of the sources said. The person added that the Bengaluru-based startup has been cutting costs through scaling down on software services, moving plans from premium to basic since September 2022.The affected employees – who were informed about the layoffs from Thursday to Saturday in conversations with a human resources executive and chief technology officer Praveen Kumar – will receive severance packages of the number of weeks that equate to the number of years served at the startup, another of the sources said.
“In a company of our size, we will, in the normal course of our operations, redeploy resources. This is organic and a reflection of adjustments and/or performance management parameters,” a spokesperson said in response to ET’s request for comment.
In October last year, Livspace had earmarked a corpus of $100 million for acquisitions to go deeper in existing geographies, add new categories to its core offerings as well as introduce more margins to its overall business.
Earlier, in 2020, Livspace had laid off 450 employees, 15% of the total workforce due to the impact of the Covid-19 induced lockdowns.
Startups across the board have taken to layoffs to extend their cash runways with a funding winter hitting growth and late stage companies in 2023, mature tech companies like Dealshare, GoMechanic, MohallaTech, Swiggy, Dunzo, Ola, Cashfree, Byju’s, Vedantu, Unacademy have also downsized staff.
Earlier this month, Livspace competitor HomeLane too undertook a cost-cutting exercise that led to termination of a significant chunk of the company’s technology and product roles, a team that had about 100 people.
“We did have to resize because we had to cut down on some fixed costs. All of us have had to do this…we are not immune to this,” founder and CEO Srikanth Iyer told ET. HomeLane’s move was also aimed at driving profitability.
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