Real estate portal Housing.com said it would cut more jobs as it scales back its rental search business to focus on the house purchase vertical. This means layoffs at the startup could far exceed 800 as was known earlier.
“We will be reorganising the company to fit this new strategy and, to this end, expect to reduce our workforce. The company values the contributions of its talented team and will do everything it can to support its departing team members," said the newly appointed chief executive officer Jason Kothari in a statement.
However, the company management has not spelt out the exact number of layoffs. “It is a major restructuring and the company does not want to talk about it,” said a person aware of the development.
Housing is at the centre of a major layoff spell that has gripped the Indian startup world even as the venture capital funding is drying up. Investors have become increasingly vary of putting high valuations on firms without a clear visibility of revenues or operational growth. The cumulative number of reported cases of job cuts is around 2,000 while many go unreported across numerous small startups with less than 100 employees.
According to industry officials, Housing has already closed a dozen businesses and shut operations in 25 cities. The SoftBank-backed startup’s troubles started when it rapidly expanded its operations and spent heavily on brand building under former CEO Rahul Yadav, leaving the company with cash reserve for hardly five-six months at the time of his controversial exit. This has forced the company to scale back its businesses and reduce workforce.
Over the past few months, it laid off 600 people and decided a fortnight back to relieve around 200 more this month.
After the recent layoffs, it is estimated to have around 1,900 employees and the fresh round of firing that has just been announced would further reduce its workforce substantially.
The decision is partly due to the directives from its investors to substantially bring down expenditure. “The board had set a target to bring down cash burn and the recent measures were not enough to bring it to that level,” a second person privy to the decisions at Housing had said earlier.
Housing has adopted a strategy to be leaner by bringing down workforce and focusing on the house purchase segment. It has decided to scale back house rental search and related businesses to focus on helping users on resale, new house purchase and home loans. “Home-buying is the largest and most lucrative segment in Indian real estate and this strategic change will allow the company to focus on gaining market leadership in this space,” said a statement from the company.
Besides Kothari, Housing recently brought in Mani Rangarajan as chief financial officer, Nikhil Rungta as chief marketing officer, Nandini Mehta as general counsel, Abhishek Hota as chief of staff and Keerthi Kiran as vice president, new real estate projects.
The company had made a string of acquisitions including risk assessment service provider Realty BI, real estate community forum IREF and CRM solution for real estate developers HomeBuy360.
The firm, founded by a dozen IIT Mumbai graduates during their final semester, has so far raised around $120 million from investors and is in talks for fresh funding.
News Corp, which holds a 30 per cent stake in PropTiger that competes with Housing, acquired the parent of this website in March this year.