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LocalOye lays off 60 employees as it rejigs operations

By Vijayakumar Pitchiah

  • 17 Nov 2015

Mumbai-based Imma Web Pvt Ltd, which runs LocalOye, a mobile-only marketplace for local household and personal service providers, has laid off 60 of its 100-member call servicing unit staff as part of it restructuring plans.

LocalOye said the move is a result of the company’s decision to automate the process of hiring service professionals.

In a telephonic interaction with Techcircle.in, LocalOye founder CEO Aditya Rao said while manual intervention cannot be completely done away with, a lot of the company’s operations that was handled by the call servicing unit, could be handled by automation as well its service partners through the backend app.

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“Over the past few months, we have been hard at work in prioritising efforts on better monetisation and technology adoption from service partners, and this restructuring is another step in that direction. Our partner additions include revenue management tools, online payments, lead tracking, etc,” Rao said earlier in a statement.

According to the company statement, the full and final settlement with the 60 employees has been completed.

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“We have taken a very conversative approach at a very early stage so that we do not have to go through something like this in the next 15 months,” said Rao.

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Started in 2013, LocalOye offers services in more than 90 categories across home services, education services, beauty services, health and fitness services, event planning services and online consultancy services. It claims to work with more than 4,200 partners across services and has serviced more than 5 lakh customers. The company has operations in Mumbai, Bangalore and Delhi-NCR region.

In April this year, LocalOye raised $5 million (Rs 31 crore) in Series A round of funding from Tiger Global Management and Lightspeed Venture Partners.

According to an earlier VCCircle report, an estimated 1700 employees have been laid off over the last three months across several internet startups such as Housing, Zomato, TinyOwl and LocalBanya with many more such cases going unreported. Firings and shutdowns happen rather routinely among many 50-100 employee startups, the report added.

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This, many believe, is due to flawed hiring policies, high cash burn rate along with near-to-zero profitability. This, in turn, has recalibrated investors' approach towards follow-on funding to startups. Follow-on funding to startups are now coming with strict terms and conditions requiring rationalisation and restructuring of operations.

For instance, food ordering startup TinyOwl got $7.5 million (Rs 50 crore) in fresh funding from existing investors Sequoia Capital and Matrix Partners in October, a month after it showed the doors to 100 employees. Earlier this month, one of TinyOwl’s co-founders was held hostage after it laid off another 112 employees. In all, TinyOwl has terminated the services of 212 employees over the past three months. The move is said to have helped the company reduce operating costs by 43 per cent. TinyOwl’s sales, marketing, business intelligence and data teams saw maximum churn 

In October, restaurant listing and services company Zomato said it was laying off around 300 employees worldwide, or nearly 10 per cent of its workforce.

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