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Used-car startup Spinny axes up to 300 jobs following merger of units

The used-car platform said it is merging its budget and luxury platforms to expand its offering to customers.

Used-car startup Spinny axes up to 300 jobs following merger of units

Thursday August 03, 2023 , 3 min Read

Used-car platform Spinny has cut around 4.5% of its total workforce following the merger of its budget and luxury offering platforms, Truebil and Spinny Max, with its main platform.

Spinny said the rationale behind the merger was to offer customers a selection of cars across price points on a one-stop platform, to simplify discovery.

The company has around 6,000-6,500 employees across its business units. The 4.5% reduction in the workforce translates to laying off around 270-300 employees.

"This business reorganisation will strengthen our go-to-market business model, reduce costs and improve our margin profile, putting us on an expedited path to profitability," said Niraj Singh, Founder and CEO of Spinny.

The company stated that the merger will enable it to achieve its goal of 50% business growth by the end of the calendar year.

The news was first reported by Moneycontrol.

Spinny's spokesperson denied a slowdown in any business units and said that the company has, in fact, been seeing a rise in demand for budget-friendly, used cars.

In 2020, the Gurugram-based company strategically acquired its competitor, Truebil, for an undisclosed amount, driven by the increasing demand for used cars in the country. In 2022, the company launched Spinny Max to offer used luxury cars.

"We have witnessed a sharp uptick in demand for reliable, budget-friendly cars as most people have resumed work from the office. By splitting our inventory of cars across different brand platforms, we were sometimes unable to offer enough options to such customers," added Singh in a media statement.

Consolidation underway

While Spinny remains upbeat, there has been a palpable slowdown in used car sales across India, especially over the last nine months on the back of unfavourable macroeconomic conditions and recession fears making people rethink luxury expenditures, a Mumbai-based mobility analyst told YourStory.

Car companies like Cars24, Spinny, and CarDekho, which have secured substantial funding from big investors, have been cautious in their approach to expanding their businesses.

CarDekho reportedly pulled out of the used-cars retail business completely in January.

OLX last month sold off its auto business, housed under Sobek Auto India, to Mumbai-based Cartrade for Rs 537 crore in cash.

Prosus, which owns OLX, said it was looking for buyers for the automotive business given weak global macros and rising challenges in the business. Spinny was reportedly part of these discussions as well.

However, there are conflicting views regarding the slowdown in used car sales, with some questioning whether it is due to a lack of buyers in the market or potential buyers waiting for newer models to enter the used car market.

Edited by Kanishk Singh