Synapsica lays off 30% staff month after CEO, COO detained in fraud probe
The health-tech startup has laid off nearly 30 employees as part of a restructuring and to build reserves for the next two years; says no connection with investigation.
Friday October 21, 2022,
3 min Read
Y Combinator-backed healthtech startup, already bruised by the recent detention of two of its founders, has laid off nearly 30 of its 100-odd employees citing market conditions, according to people familiar with the developments.
The startup, which provides AI-based radiology reporting solutions, resorted to the layoffs as part of a restructuring and to redefine its business goals, said Co-founder and Chief Technology Officer Kuldeep Singh Chauhan.
Police detained Co-founders Meenakshi Singh (CEO) and Dr. Cherian (COO) last month in a financial fraud investigation brought by a former founding and core-team member.
Kuldeep denied the layoffs were a fallout of the detentions.
“The market conditions and situations are not optimal. The company and its product are working as usual, and the team is working to build and solve healthtech problems. We are functioning strongly. Yet the growing marketing slump conditions have pushed us to take this call,” Kuldeep said in a phone conversation with YourStory.
He added that the company has provided two months' worth of severance payouts to the employees who have been laid off and that it would also assist them in finding a job.
A Synapsica employee who has been laid off, approached independently by YourStory, confirmed due process had been followed, but declined to share more details.
Details on the company’s financials weren’t immediately available.
Founded in 2018, Synapsica raised $4.2 million in a Series A round from investors including Y Combinator, IvyCap Ventures and Endiya Partners last year.
Current market conditions and a funding crunch have forced several startups to tighten and refocus their business operations and teams. Edtech giant BYJU’s recently said it will be laying off about 5% of its workforce, or about 2,500 employees, across product, content, media, and technology teams to avoid redundancies.
Synapsica is also fighting a legal battle against the former founding member mentioned earlier, while Meenakshi and Dr Cherian remain in judicial detention, said people familiar with developments at the company.
“The conflict is separate from the restructuring decision. That is a business call,” one of them said.
“While Dr Cherian and Meenakshi have been under judicial detention, the conflict is purely one of personal vendetta and conflict,” this person added. “There was a tiff with the founding team member, and while it could have been amicably resolved, the same wasn’t done.”
Due judicial and legal processes are being followed, he added.
YourStory couldn’t immediately contact the founding team member.
Edited by Feroze Jamal