'Incredibly difficult decision': Bike-sharing startup Bounce CEO on layoffs
A file photo of Bounce co-founders: (L-R) Varun Agni, Anil Giri and Vivekananda Hallekere
Bike-rental startup's CEO and Co-founder Vivekanada Hallekere on Tuesday announced that the company has had to take the "incredibly difficult decision" of laying off around 130 employees, which constitutes about 22 per cent of its total workforce. In a note posted on the company's blog, he wrote that the decision was purely an outcome of changing business priorities due to the external environment and "does not either reflect the unparalleled capability, performance, or dedication of any member of our team". The coronavirus pandemic has wreaked havoc on the startup ecosystem, with several of them having to resort to salary and job cuts, in a bid to stay afloat.
"While we cannot know the future, our hope is that these cuts are sufficient to put us on a strong path to continue through the next period of global uncertainty and change," Vivekananda said.
The CEO's note also mentioned that all laid-off employees will be given a severance of three month's salary, as per their original pay before the announced cuts in April, 2020. The employees will have the option of taking this amount in one go or have it credited to their accounts monthly, in an attempt to ensure salary credit continuity.
Additionally, Bounce will be reinstating the salary of the affected employees to the amount before the salary cuts were announced. "As per the exercise, the entire deferred amount will be given to them," Vivekananda said.
Leaving employees will also continue to have the health insurance that was provided by the company, until the end of December, this year. Employees with ESOP (Employee Stock Ownership Plan) will be awarded on a pro-rata basis.
The startup is setting up a support team to help the former staffers find suitable jobs "at the earliest". "The leaving team has the option of being part of this process," the CEO said.
In his note, Vivek also highlighted the fact that it is evident that the way people view the need for mobility will change even more significantly than than the company had expected "We have made valuable additions to our product offerings to suit the new needs and changing priorities of our customers, increasing the pace of electric vehicle adoption, but we also must acknowledge the world has changed even beyond what we anticipated," he said.
In January, Bounce announced that it had raised a funding of $105 million in its Series D round. Accel Partners and Facebook Co-founder Eduardo Saverin's B Capital Group had led the round. Existing investors Accel Partners India, Falcon Edge, Chiratae Ventures, Omidyar Network India, Maverick Ventures, Sequoia Capital India, and Qualcomm Ventures also participated in the round.
The company recently entered a partnership with electric scooter startup Ather Energy, allowing users to buy Ather 450 under its peer-to-peer programme.
Bounce operates a low-cost, dockless scooter rental model in Bengaluru and Hyderabad, with a fleet of over 23,000 vehicles (20,000 in Bengaluru and 3,000 in Hyderabad). It clocks over 1,30,000 (1,00,000+ in Bengaluru and 30,000+ in Hyderabad) rides a day.