WayCool Fires 70 Employees in Second Restructuring Exercise Within a Year

WayCool Layoff

Three points you will get to know in this article:

  • Sales, marketing, research, and technical employees were affected by the layoffs
  • A WayCool spokesperson did not disclose the number of layoffs due to warehouse rationalization
  • Around 300 workers were laid off by WayCool in July last year
WayCool Logo

Introduction to WayCool

With a focus on food, WayCool are the only supply chain player in India that operates under ‘full-suite’ technology. WayCool business model merges physical and digital elements to create diversified supply chains that generate greater profits for all stakeholders. These companies offer varying products such as fresh produce, dried fruits, vegetables, dairy, and value added items. The company is committed to serving both consumers and end-users alike.

Second Round of Layoffs and Operational Changes

Over the past month, WayCool Foods, headquartered in Chennai, made the difficult decision to let go of around 70 employees in its latest round of layoffs, marking the second such instance in less than a year.

This recent wave of layoffs affected staff members across various departments, spanning sales, research, marketing, and technology, as disclosed by the same sources.

WayCool's Response to the Layoffs and Restructuring

Additionally, the company, which encompasses subsidiaries like WayCool Censa and WayCool BrandNext, also ceased operations in its warehouses during the same period, the sources noted. They attributed this strategic restructuring to the startup’s inability to secure new funding over the past two years.

A representative from WayCool confirmed the occurrence of staff reductions, although specifics regarding the number of affected employees were not disclosed.

“Our team at WayCool has dedicated the past year to bolstering our in-house brands, leveraging our streamlined supply chain to its fullest potential. Through this focus, our brands have seen considerable growth, empowering us to establish a direct, warehouse-free supply chain from origin to market. As a result, we’ve made adjustments to our warehouse operations, which unfortunately led to some job redundancies,” the spokesperson conveyed in a statement.

Greenlighting Direct Listing of Indian Companies at GIFT-IFSC

Last July, Finance Minister Nirmala Sitharaman made an important announcement: the government would greenlight the direct listing of Indian companies on exchanges at GIFT-IFSC. Fast forward to January, and the Centre has cleared the path for this initiative by unveiling the necessary regulations. What does this mean? Well, it’s quite the breakthrough. Indian companies can now take their shares directly to international stock exchanges, such as the India International Exchange and NSE International Exchange. These exchanges fall under the watchful eye of the International Financial Services Central Authority (IFSCA).

Future Prospects and Investor Backing

The spokesperson enthusiastically shared that this strategic transition has significantly slashed the startup’s EBITDA loss by more than 80%, paving the way for a promising shift towards EBITDA profitability expected in Q1 FY25.

“Excitingly, a number of our business units have been consistently generating positive EBITDA for several months now. Currently, we’re in the final stages of securing additional funding, affirming our commitment to raising capital as needed to support our growth,” the statement elaborated.

Last year, WayCool unveiled its FMCG arm BrandsNext, which boasts a portfolio featuring beloved brands like Madhuram, KITCHENji, DeziFresh, and Freshey’s.

Previous Restructuring and Funding Challenges

Last year, WayCool underwent a significant restructuring, which unfortunately led to the departure of approximately 300 team members in July. While some chose to leave on their own terms, others were regrettably asked to part ways.

In the same timeframe, there were talks circulating about the agritech startup’s potential fundraising efforts, aiming for a substantial $50 million to $70 million, with a valuation hovering around $900 million. However, due to the challenging funding landscape at the time, these discussions didn’t materialize into a successful deal. Consequently, WayCool had to tighten its belt and trim expenses to ensure its sustainability amidst the funding crunch.

Financial Performance and Funding Status

WayCool is yet to submit its financial records for FY23 to the Ministry of Corporate Affairs (MCA). According to reports, the company has significantly slashed its expenditures by 60% since October 2022 and aims to wrap up FY23 with a revenue of INR 1,700 Cr.

In the previous fiscal year, the startup witnessed a staggering 142% year-on-year increase in net losses, totaling INR 360.5 Cr. However, there was a remarkable surge in operating revenue, reaching INR 926.9 Cr from INR 382.3 Cr in FY21, marking a 2.4X growth.

WayCool Foods, based in Chennai, recently underwent its second round of layoffs, affecting approximately 70 employees across various departments and ceasing operations in its warehouses. This move was linked to the company’s challenges in securing new funding over the past two years. The company’s strategic transition towards a warehouse-free supply chain has significantly reduced EBITDA losses, bolstering prospects for profitability in Q1 FY25. Despite facing funding challenges, WayCool remains committed to securing additional capital to support its growth. Additionally, the company aims to wrap up FY23 with a revenue of INR 1,700 Cr after slashing expenditures by 60%.

Start typing and press Enter to search

Shopping Cart