After firing about 10% of its staff and shutting operations in small towns and the UAE, Curefit founders Mukesh Bansal and Ankit Nagori have told their employees they don’t see the environment around them coming back to ‘full normal’ until a vaccine for the virus is found.
Curefit, which has come under fire from several of its staff that were laid off, is one of the many startups whose business has been directly impacted due to the virus outbreak. The company runs 230 fitness centres across India and has offline food outlets as well as cloud kitchens to serve online orders. The company is planning to focus on its online offerings going forward.
“We don’t see life returning to full normal until a vaccine is found and the entire globe is vaccinated. Till then, we will have a new normal with limited movement and severe restriction to mass gatherings, which include group workout formats like Cult. In such a situation, it is critical that we manage our costs for the long-run viability of the business. If we maintain the exact same cost structure while revenue continues to be negligible, it will be grossly unfair to all stakeholders including employees who have done so much to build the business,” the founders wrote to their staff.
Curefit laying off about 800-1,000 people is one of the single largest layoffs by a well-funded startup in India.
“Even though our revenue went down to nearly zero from over 70 crores a month, we have paid full salaries to all employees for the months of March, April and even May for many employees who are working full-time. That is 3 months of massive burn totaling over $10 million without any revenue whatsoever from customers,” the Bengaluru-based startup said explaining why it has had to take recent measures such as firing employees and announcing pay cuts across the board.
The Curefit founders have taken a 100% pay cut while the same for management is 50% and the rest of the staff, based on seniority, would see pay cuts of 20-30%. According to the founders, this will save Rs 8 crore per month for the company and it has further reduced marketing spends significantly to save another Rs 10 crore a month.
Amid all of this, the company was also facing criticism over how it contributed Rs 5 crore to PM Cares fund but then had to lay off employees.
“Half of these funds are contributed by founders and management and the other half by the company. These funds wouldn’t cover even 14 days of trainer salary and less than five days of the wage bill of the entire company,” the founders wrote explaining their decision to donate to the PM Cares Fund and other grants working to solve the virus outbreak. The company did not immediately respond to TOI’s query.
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