Shuttl, the app-based bus aggregator, is heading for pay cuts and possibly layoffs, as the Sequoia-backed start-up watches business losses amid the foreclosure.
In a letter to employees, co-founder and CEO Amit Singh said he and co-founder Deepanshu Malviya will cut wages by 50%, adding that the company will have to give up bonuses during the year by Classes. The letter, examined by Business Standard, also said that the company was considering temporary salary cuts and could also distribute pink slips starting in fiscal year 21.
“Start-ups like ours generally work on 18 to 24 months of oxygen assistance. If we lose our oxygen and our balance because of an “act of God”, we must find a way to survive longer with less oxygen to recover our balance, “the courier said. “We can’t save all the jobs, but if we save the business … we can make sure that our team members do better in the long run,” he added.
According to an informed person, a company director informed his team that the salary cuts would be in line with wages. There will be no discounts for employees earning less than 5 lakh Rs per year.
For employees earning between 5 and 10 lakh rupees per year, there may be a reduction of 10 percent. It could be a 20 percent reduction for those in the Rs 10-30 lakh bracket, 30 percent for those in the Rs 30-50 lakh bracket and a 35 percent drop for those who earn above Rs. 50 lakh.
The company can also fire people working in operations, depending on the person. “We will help outplacement and see how we can extend insurance benefits to those with whom we have to separate. We are working to increase the size of the ESOP pool to ensure that those who help us rebuild stay significantly better in the long run, ”added the courier.
Singh declined to comment on the matter, when contacted.
Shuttl provides application-based bus route sharing services. He probably suffers because the professionals, who constitute the major part of his clientele, work mainly at home. Most private offices had started asking employees to work from home even before the lockdown.
The pandemic has been difficult for businesses and small start-ups, as they do not have the cash reserves or resources of large companies.
Shuttl, which started in 2014, is said to have more than 100,000 passengers a day in six cities, with more than 1,800 buses. To date, the company has raised approximately $ 90 million from major investors such as Sequoia Capital, Lightspeed Ventures, Amazon and Dentsu.
According to a recent survey by LocalCircles, start-up start-ups, finance-dependent start-ups and small businesses will soon be fighting for survival.
LocalCircles surveyed 35,000 start-ups, small and medium-sized enterprises (SMEs) and entrepreneurs on how they plan to deal with the epidemic in the short term, so that their businesses can recover after the restrictions are lifted .
He revealed that around 71% of start-ups and small businesses were facing problems such as declining demand for products and services.