Urban Ladder Lays off 40% of its Workforce in Effort to Turn Profitable, Says Report
The leadership team at Urban Ladder now claims it is just a couple of months away from turning Ebitda profitable.
When asked about the reason behind the layoffs, Urban Ladder’s co-founder and CEO Ashish Goel said it was absolutely necessary.
Furniture retailer Urban Ladder reportedly laid off 40% of its workforce during the March quarter as it struggled to turn profitable.
A Business Line report said that the company’s headcount has come down to 700 from over 1,110 earlier, adding that the layoffs have happened across levels, functions and geographies.
Consequently, the leadership team at Urban Ladder now claims it is just a couple of months away from turning Ebitda (earnings before interest, tax, depreciation and amortisation) positive.
When asked about the reason behind the layoffs, Urban Ladder’s co-founder and CEO Ashish Goel said it was absolutely necessary. “We had no other option. We would have shut down if we hadn’t asked them to leave,” he said.
Reportedly, Ajit Joshi, who was hired as Urban Ladder’s President and COO in July 2017, had also resigned in March citing personal reasons.
According to the report, the employees who were handed the pink slips were told by the management that Urban Ladder’s inability to raise more funds and a struggle to turn profitable had prompted this move.
Goel was quoted as saying, “We have made more than our share of mistakes and have made some tough, painful decisions and gone through a reset from January to March. Now, we are on track to be profitable at the Ebitda level next month and our goal is to deliver Rs 8-10 crore of Ebitda this fiscal. It’s not a big number, but it is a start.”
Urban Ladder had posted massive losses of Rs 459.1 crore on revenue of Rs 101.9 crore in FY17, and then saw Rs 117.3 crore of loss on revenue of Rs 204.70 crore in FY18, according to its RoC filings accessed by paper.vc.
The Ratan Tata-backed furniture retailer has now recorded revenue of Rs 345 crore net of cancellations and returns in FY19, said Goel, without divulging details on the loss figure.
The start-up, which already has 11 stores in Bengaluru and Delhi, also plans to open stores in Chennai and Pune in the next six months.
Urban Ladder’s last funding round happened 18 months ago. The start-up has raised a total of $112.8 million to date. On his plans to raise more funds, Goel said: “At some point, we will. We have cash in the bank; we generated Rs 1 crore in cash in the business last month and expect to generate cash in the September quarter. On a core operating basis, the cash we have is adequate for us.”
While a February 2019 report had claimed that 90 employees were laid off at Urban Ladder, the new report shows the activity took place on a much larger scale.
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