UPDATE – 11 June 2019
The following are Ashish Goel’s (CEO of Urban Ladder) remarks on the sudden reportage of the employee layoffs that occurred nearly three months ago
As an organization, February and March were not easy months for us, as we are a company that deeply appreciates its employees. Having said that, after taking those tough calls, we are happy to know that the employees we did part ways with have used Urban Ladder as a great stepping stone to pursue other, great opportunities within the industry and beyond.
We look forward to the future as we have some exciting things in store in the upcoming few months.
In February/March, 90 employees (from the head office alone) had been let go from the organization – the previous total headcount number was 957 and now is 711 which amounts to about 25% (and not 40% as sources online have revealed today) which includes third party employees and resources.
Online furniture retailing startup Urban Ladder is breathing shallow and in order to survive the Sequoia Capital backed furniture retailer has downsized its total workforce by
40% 25% and even top executives made exits from the startup in last few months, reported Business Line.
According to the report, which refers industry sources including former Urban Ladder employees, the Bangalore-based startup let go of 40% of its employees in the quarter that ended in March. The Business Line report also cites that its leadership team claims it is just a couple of months away from turning EBITDA (earnings before interest, tax, depreciation and amortisation) positive.
The downsizing of employees were carried out across all levels, functions and geographies and now the company counts 700 s its total headcounts, said the report.
Just two years back, Urban Ladder had hired Ajit Joshi as President and COO of the company however within mere two years he has resigned in March, citing personal reasons. Joshi is a retail veteran with 30 years of experience And prior to Urban Ladder he used to drive the business at electronics retailer Croma (a Tata Enterprise) as its CEO and MD.
Besides Joshi, other top executives have also moved on and those were heading Urban Clap’s various functions, including Operations and Supply Chain, Sales and Marketing, Product, Engineering and HR.
Unable to raise more funding as well not turning profitable were the major reasons cited by the Urban Ladder management to the employees who were handed pink slips. Launched in 2012, Urban Ladder has raised a total of about $112 Mn in eight rounds far, with last funding came in debt fundraise from Trifecta Capital.
When asked why the company resorted to a second round of layoffs, Ashish Goel, co-founder and CEO of Urban Ladder, said it was absolutely necessary. “We had no other option. We would have shut down if we hadn’t asked them to leave,” said the report citing the CEO.
Ashish Goel further said in a statement, “We have made more than our share of mistakes and have made some tough, painful decisions and gone through a reset from January to March. Now, we are on track to be profitable at the EBITDA level next month and our goal is to deliver ₹8-10 crore of EBITDA this fiscal. It’s not a big number, but it is a start.”
Urban Clap, which also counts Ratan Tata as its investor, had tied up with Tata Housing in early 2017, to offer design solutions for homes in Mumbai, Bengaluru and Gurgaon with its exclusive range of products.
Later in August of same year, the startup received single brand retail trade (SBRT) licence wherein the company is allowed to on-board foreign players to have 49% stake under automatic route, and FDI beyond 49% and up to 100% through government approval route.
However, the newly introduced FDI policy in e-commerce is said to be primary reason behind Urban Ladder’s inability to raise funds from new investors as the new FDI norms are making potential investors cautious. “With little or no resources to continue with operations till things played out, Urban Ladder was forced to resort to mass layoffs,” said one of the sources of the report.