“We’ve been asked to start searching for alternative job opportunities,” says an employee.

“It seems like we are on an unofficial notice period,” adds another. 

These are restless times for nearly 2,600 employees of the business-to-business (B2B) e-commerce platform Udaan, which has laid off over 550 people in two rounds—one in June and another in November this year. The layoffs came even as over 800 employees exited the startup voluntarily this year, says a third employee.

And it doesn’t end there. More layoffs are in the offing as the five-year-old company narrows down its focus to improving margins than burning cash to chase scale. 

Udaan claims to have reduced its cash burn by 75% over the last year and turned unit-economics positive unit-economics positive Positive unit economics means that your business model is working. It means you are making more money per customer than it costs you to get one. In this article, you'll learn tactics that can significantly improve your startup's business model and help you reach positive unit economics. in June. This is critical as the unicorn is saddled with accumulated losses worth over $1 billion as of March 2022.

“Based on the level at which the company wants to operate, two more rounds of layoffs are likely to happen,” the third employee continues. A fourth employee confirms the same, saying that the team size will be cut to ~2,000 employees by January 2023. Udaan is also unlikely to renew contracts of its off-roll employees as it wants to bring the strength of its business-development executives (BDs) down by at least a quarter to under 10,000. An Udaan spokesperson declined to comment.

The startup that took just 18 months to reach unicorn status in 2018 and built a network of nearly 30,000 distributors and three million retailers across 1,100 Indian cities has hit the brakes hard on expansion. 

It’s not that Udaan is alone in this. Facing funding blues, a number of once high-flying startups are scaling down and refocusing on fundamentals to conserve capital. 

New initiatives, which require capital infusion or lack a clear path to profitability in the near future, are the first to go. So, Udaan has pressed the pause button on its business-to-consumer (B2C) experiment Pickily and community-buying initiative Price Company—launched in 2020 and 2021, respectively.

Udaan is also restructuring its core business of B2B deliveries to achieve Ebitda Ebitda Earnings before interest, taxes, depreciation, and amortization -level profitability. Besides closing unprofitable PIN codes in some categories, it has scaled down ‘Fresh’, its fruits and vegetables category from 18 cities to just one.