Urban Ladder to lay off 40% of its workforce
11 Jun 2019
Online furniture retailer Urban Ladder has given the pink slip to around 40 per cent of its workforce in the January-March quarter of the 2018-19 financial year as part of its bid to sustain operations amidst tough competition from rivals.
The company has been cutting flab to stay trim even as its management claimed that it is just a couple of months away from turning EBITDA (earnings before interest, tax, depreciation and amortisation) positive.
Ratan Tata-backed Urban Ladder has been struggling to earn a profit without any result so far and this in turn affected the company’s ability to raise funds to drive business.
The layoffs were carried out across levels, functions and geographies, bringing down the company’s headcount to 700, reports citing sources said.
This is the second time Urban Ladder has resorted to job cuts since 2016, but the company says there was no alternative than closing down.
“We had no other option. We would have shut down if we hadn’t asked them to leave,” reports cited CEO Asish Goel as saying.
Several of the company’s top rung, including President and CEO Ajit Joshi and heads of operations and supply chain, sales and marketing, product, engineering and HR, have all have quit citing personal reasons.
The company admits that it had made mistakes in the past which forced them to take tough, painful decisions.
However, the company says, recovery is on the way and the company is on track to be profitable with an EBITDA of Rs8-10 crore this fiscal.
Urban Ladder, which will turn seven next month, doubled its revenue to Rs204.7 crore in FY18 from Rs101.9 crore in FY17. It pared losses from Rs459.1 crore in FY17 to Rs117.3 crore in FY18, as per its filings with the Registrar of Companies.
The company notched up revenues of Rs345 crore net of cancellations and returns in FY19.
With 11 stores in Bengaluru and Delhi, offering products ranging from Rs2,000 to Rs1.5 lakh, Urban Ladder plans to open stores in Chennai and Pune in the next six months.
The start-up has raised $112.8 million to date. Against this, rival Pepperfry has raised $197.5 million to date and has established over 45 experience stores pan-India.
The entry of Swedish furniture major IKEA, which recently invested in home interiors and renovation platform Livspace, has further toughened competition for Urban Ladder.