Shuttl, the app-based bus aggregator, is headed for salary cuts and probably lay-offs, as the Sequoia-backed start-up stares at business losses amid the lockdown.
In mail to employees, co-founder and CEO Amit Singh stated that he and co-founder Deepanshu Malviya were taking a 50 per cent salary cut, adding that the company would have to forgo bonuses in the current financial year. The mail, reviewed by Business Standard
, also stated that the firm was considering interim pay cuts, and could also hand out pink slips starting FY21.
“Start-ups like ours typically work on 18-24 months of oxygen support. If we lose our oxygen and our scale to ‘an act of god’, we need to find a way to survive longer with less oxygen to reclaim our scale,” the mail said. “We can’t save all jobs, but if we save the company…we can ensure our team members are better off in the long run,” it added.
Singh told Business Standard
that there will be no cuts for employees earning under Rs 5 lakh per annum. He said that cuts would be with respect to category. Median pay cuts would be 20% for leadership and 10% for others employees.
The firm may also lay off people working in operations, according to the person. “We will help with outplacement and see how we can extend insurance benefits to those we have to part ways with. We are working towards increasing the size of the ESOP pool to ensure those who help us rebuild remain significantly better off in the long run,” the mail added.
provides app-based bus ride sharing services. It is likely suffering because professionals, who form bulk of its customer base, are mostly working from home. Most private offices had begun asking employees to work from home even before the lockdown.
The pandemic has been tough on companies
and smaller start-ups, given that they do not have the cash reserves or resources of larger firms.
Shuttl, which started in 2014, is claimed to have over 100,000 daily riders across six cities, with over 1,800 buses. The company has, so far, raised around $90 million from major investors such as Sequoia Capital, Lightspeed Ventures, Amazon, and Dentsu.
According to a recent survey by LocalCircles, early-stage start-ups, start-ups dependent on funding, and small businesses will soon be fighting for survival.
LocalCircles conducted a survey among 35,000 start-ups, small and medium enterprises (SMEs), and entrepreneurs on how they plan to cope with the outbreak in the short term, so that their businesses could recover once the restrictions are removed.
It found that about 71 per cent start-ups and small businesses were facing issues such as lower demand for products and services.