Simpl Faces Second Round of Layoffs in Bid for Profitability

The Bengaluru-based Buy Now, Pay Later (BNPL) startup Simpl has implemented a second round of layoffs in less than a month, impacting approximately 30 employees across various departments, including mid-senior management. This follows a larger layoff in May 2024 that affected roughly 160 employees.

The recent job cuts are part of a company-wide effort to streamline operations and achieve profitability by mid-2025. The move comes amidst concerning financial pressures, including a high monthly cash burn and a slowdown in acquiring new users.

Balancing Growth with Financial Responsibility

According to media reports, Simpl’s leadership informed department heads about the layoffs on June 6th, with the process commencing immediately. In a statement, Ashish Kulshrestha, Head of Communications at Simpl, emphasized the company’s commitment to operational efficiency. He explained, “We consistently evaluate our business to enhance efficiency and agility, fostering sustainable growth. Our recent expansion necessitated strategic adjustments to optimize operations.”

Severance Packages Offered

Simpl has assured the laid-off employees of a fair severance package. This includes a fixed salary for the standard two-month notice period, along with additional compensation amounting to 15 days’ salary for every year of service with the company.

Company Background and Current Landscape

Founded in 2018, Simpl boasts a network of over 26,000 merchants, including prominent names like Zomato, Makemytrip, Big Basket, and Crocs. The platform offers BNPL as a checkout option and has introduced a “pay-in-3” product for customer convenience.

However, despite a 176% surge in operating revenue to Rs 87.3 crore in FY23, Simpl’s net loss grew by a staggering 147% to Rs 356.6 crore during the same period. Analysts suggest that the company over-hired during the post-pandemic boom to expand its checkout network into the direct-to-consumer (D2C) segment. Unfortunately, the D2C business has stagnated since last year, necessitating the recent layoffs. In fact, these recent cuts mark the third round of layoffs for Simpl in 2024, following smaller personnel reductions in March and April.

Industry-Wide Trend

The layoffs at Simpl reflect a broader trend of job cuts across various sectors in India during 2024. Major companies like Swiggy, Ola, Paytm, and Flipkart have all implemented significant workforce reductions this year. For instance, Ola Cabs laid off approximately 200 employees in April, Byju’s let go of 500 employees, and Swiggy reduced its workforce by 400 employees.