Udaan Undertakes Strategic Restructuring with Layoffs Amid Business Consolidation
Three points you will get to know in this article:
- Udaan’s September restructuring led to over 100 layoffs as it consolidated its essentials and discretionary businesses.
- The company secured USD 340 million in Series E funding, aiming for growth and profitability despite a decline in gross revenue.
- The spokesperson emphasized Udaan’s commitment to Kirana commerce and empowering small and medium businesses.
In September, Udaan, the B2B e-commerce platform, underwent a strategic restructuring that led to the unfortunate layoff of over 100 dedicated employees. The company, headquartered in Bengaluru, undertook a comprehensive reorganization, uniting its essentials business encompassing FMCG, staples, and pharma with the discretionary business covering general merchandise, lifestyle, and electronics.
Leadership Transition and Business Consolidation
As part of this restructuring, Vivek Gupta, who had previously overseen the essentials business, transitioned from his operational role. Stepping into this pivotal position is Uday Bhaskar, entrusted with the responsibility of leading the newly consolidated unit.
This significant transformation underscores Udaan’s commitment to adapt to evolving market dynamics while ensuring operational efficiency. The changes implemented are integral to the company’s pursuit of sustained growth and responsiveness to the dynamic B2B landscape.
Company Spokesperson Addresses Workforce Reductions
“Confirming staff adjustments amid our company’s restructuring efforts, a representative from Udaan shared, ‘We’ve been making significant strides in shaping a profitable business, consistently fine-tuning our well-established model to better serve our customers with agility. However, these adjustments have unfortunately led to some positions becoming redundant.’
The spokesperson emphasized, ‘Our unwavering commitment remains steadfast in driving Kirana commerce and empowering small and medium businesses throughout Bharat. We’re harnessing the potential of e-commerce to achieve this goal.'”
The initial disclosure came from ET Retail, marking a significant milestone in the company’s journey.
The specifics of the compensation provided to affected employees were not disclosed by the company. This marks the third instance of workforce reductions since the year 2022. In the preceding year, the Bengaluru-based firm let go of approximately 500 team members in two separate rounds of layoffs, occurring in June and November.
Previous Workforce Reductions and Funding Announcement
It’s worth mentioning that just last week, Udaan made the exciting announcement of successfully securing USD 340 million in Series E funding. This funding round was spearheaded by M&G Plc and saw participation from longstanding equity partners Lightspeed Venture Partners and DST Global.
Financial Performance and Future Prospects
With a clear focus on achieving both growth and profitability, Udaan aims to position itself as a viable contender for the public market within the coming 12-18 months. Impressively, just last week, the company successfully secured $340 million in funding from a mix of new and existing supporters through equity and convertible debt.
Despite facing a 43.1% decline in gross revenue (GMV) from Rs 9,900 crore in FY22 to Rs 5,629 crore in FY23, Udaan displayed resilience as its losses also narrowed by 33.7%, decreasing from Rs 3,132 crore in FY22 to Rs 2,076 crore in FY23.
In September, Udaan underwent a strategic restructuring, leading to the layoff of 100 employees, as it unified its essentials and discretionary business. Vivek Gupta transitioned from his role, replaced by Uday Bhaskar. The company aims to adapt to market dynamics while ensuring operational efficiency. Udaan acknowledges the impact on employees and remains committed to driving Kirana commerce. The undisclosed compensations mark the third instance of workforce reduction since 2022. However, the company made a noteworthy announcement, successfully securing USD 340 million in Series E funding, emphasizing its focus on growth and profitability despite the decline in gross revenue.
