The travel industry is one of the badly affected sectors due to the covid emergency. Some of the companies have shut down their businesses, while a few of them are still fighting for survival. Bengaluru-based two Wheeler rental firm Bounce is one of those startups that has not lost hope of revival.
In the current scenario with very low demand for two-wheeler rental, Bounce has removed 80% of its employees including the top officials. This layoff has been done to reduce the operating cost. This is the only option Bounce has right now to survive.
Why Bounce is Laying off Most of the Employees?
As per the exclusive MoneyControl report, the startup has fired 80% of its total employees. It had a total of around 300 employees at the time of laying off 80% of them.
After the major lay-off, the company is left with founders at the top level. The company expected a better recovery in 2021 but it did not happen. Sequoia Capital and Accel are the major investors in Bounce.
When asked about the current issue, Bounce CEO Vivekananda Hallekere said that I can’t reveal anything about the names of fired employees. He even denied the 80% layoff news.
He further said that we have made few changes considering the future of the startup. 2020 has badly affected the mobility business. In 2019, we hired more staff considering the future aspects. But Covid-19 changed everything.
Talking about the future plans of Bounce, he said:
“Given how 2020 has been we have decided to focus on EV two-wheeler mobility and double down on our efforts around electrification. Accordingly, we have made some decisions that have affected few employees at Bounce who will not be part of the organization. We are working with the impacted Bounce employees to get them placed in other organizations, “
Jayarama Krishnan, Sourav Sengupta, Abhishek BV, Pramod Karumbaiah, Vivek Dk are the names of few top officials who are removed from Bounce. When contacted, these staff did not say anything related to the current layoff in the mobility startup.
Earlier Layoff by Bounce
In the first round of layoffs, Bounce removed 130 people that is approximately 22% of the total workforce in June 2020.
As per the Economic Times report in February 2021, the company fired around 200 employees that is 40-60% of the total capacity. It was the second major layoff after June 2020.
Bounce is trying to reduce the employee cost as much as possible. It is laying off employees in phases. Generally, companies fire employees once but in bulk.
Before the pandemic Bounce used to invest around Rs 21 Crore per month on employees. The company first reduced this cost to Rs 7 crore. Now with the latest round of firing, employee cost has reached below Rs 1 crore per month.
One of the existing staff who did not reveal his identity said that no senior person is left in Bounce after the current layoff.
As per the MoneyControl report, currently, the startup is having 70 employees after the current round of layoffs. At a time, when Bounce was doing good business, it had a total of 600 employees and it was also valued at around $450 million.