Meesho, an e-commerce company, has laid off 251 workers, or 15% of its workforce, in a bid to reduce expenses and boost profitability, a top company executive revealed on Friday. 

No matter how long they have worked for the company, all laid-off employees will receive ESOPs and one extra month of severance compensation beyond the notice period, an email from Meesho Founder and CEO Vidit Aatrey read.

From 2020 to 2022, the company increased by a factor of ten thanks to Covid tailwinds and significant expenditures. 
"Even as we continued to follow our goals, the macroenvironment clearly and significantly shifted. As a result, we had to shorten the Project Redbull schedule for profitability while raising our GMV growth targets to 30% YoY. While our cash reserves protect us well from these difficult situations, we must continue to be extremely cost-conscious, Aatrey said.

According to a recent study by Jefferies, Meesho is already contribution-margin positive (pre-marketing and indirect expenses), the business is getting close to having no cash left over, and it is on target to reach EBITDA breakeven this year. 

"We have taken a difficult decision to part ways with 251 Meeshoites constituting 15% of the employee base, as we look to work with a leaner organisational structure to achieve sustained profitability", the company said.

An accelerated vesting of ESOPs, continued insurance benefits, job placement assistance, and a one-time severance payment ranging from 2.5 to 9 months (depending on the tenor and designation) are all part of the separation package that will be given to all those affected, according to the company spokesperson.

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