ETtech Top 5: Curefit downsizing, next-gen takes charge at HCL Tech & more

As gyms and fitness centres across the country remain shut, and with uncertainty looming over their reopening due to the Covid-19 pandemic, Curefit has cut more jobs and furloughed employees even as it looks to pivot to a ‘digital-first’ company.

Meanwhile, India’s third-largest software services firm is witnessing a change of guard as part of its succession planning exercise.

Curefit downsizing

Curefit has undertaken another round of layoffs and furloughs, two months after it laid off over 700 workers, people directly aware of the matter told ET.

The move, which is set to impact hundreds of employees, comes at a time when the health and fitness startup expects the recovery of its operations to take more than a year.

The laid-off staff will be paid for their notice period along with a severance ranging from 15 days to three months based on their role.

What’s the impact?

Curefit, which ramped up its online classes after the lockdown, is now making a complete transition since offline footfalls will take time to recover even when gyms open up, an investor in the company said.

The company started paid subscription plans for its online classes in May this year and claims to have clocked revenues of Rs 10 crore as per a CNBC-TV18 report. It also claims to have signed up 1.5 million new users with 50,000 paid subscribers. Read more

Oyo lease terminations

Hospitality chain Oyo Hotels & Homes has terminated leases at two of its flagship corporate offices in Gurugram and is renegotiating the lease on a third, sources told ET, as the cash-strapped firm looks to save on real estate costs.

Oyo was paying an estimated Rs 1.9 crore monthly rent for these three properties that seated about 4,000-5,000 employees prior to the lockdown. The company is shifting a number of its employees to Oyo-owned co-working space Workflo, sources said.

The development comes after the hospitality chain has undertaken a significant number of employee layoffs and furloughs, enforcing pay cuts and shuttering properties across markets due to the impact of the Covid-19 pandemic.

What about others?

Real estate is one of the major expenses for the majority of tech companies. Internet firms like Paytm, Ola, Swiggy, Zomato, and Uber, among others, have reached out to builders to renegotiate their rental agreements, renewal clauses and rent escalations, after facing severe business loss due to the nationwide lockdown.

Several startups have also invoked force majeure clauses to renegotiate rentals. Force majeure is enforced by companies during unforeseen events or in times of natural calamities. Read more.

Change of guard at HCL Tech

HCL Technologies co-founder Shiv Nadar has stepped down as chairman of the company’s board, paving the way for his daughter Roshni Nadar Malhotra to take over this role. Nadar will continue as the managing director and chief strategy officer of the company.

Nadar-Malhotra was inducted into the Indian IT firm’s board as an additional director in 2013, nearly four years after CEO of HCL Corporation, the holding company of HCL Technologies and HCL Infosystems

Succession plan

This move is part of a long-term succession planning and there will be no change in the company’s strategy, said HCL chief executive C Vijayakumar.

“Shiv (Nadar) continues to play the role of the chief strategy officer. And HCL still has got an exceptional leadership team, and all of us, contribute to the overall strategy and the growth,” he said.

Profit drop

HCL Technologies also witnessed a 7.3% drop in net profit to Rs 2,925 crore for the three months ended June 2020 while revenues were down 4% sequentially to Rs 17,841 crore.

The pandemic has had a major impact on Indian IT firms as global customers cut back on IT spends and put several projects on hold. Vijayakumar, however, said in an interview that they expect a sharp uptick in technology spending from clients in the coming quarters.

Read our coverage:

Top-order changes at Netflix

Also witnessing a transition in its management is the US-based video streaming service Netflix that has elevated its content head Ted Sarandos to co-chief executive officer, making him a likely successor to co-founder and current chief executive Reed Hastings. This announcement was made coinciding with the company’s Q2 earnings.

Chief product officer Greg Peters has also been given the additional responsibility of the chief operating officer

That said, Hastings noted that he is not going anywhere soon. “In terms of the day-to-day running of Netflix, I do not expect much to change. Our key executive leadership groups are unchanged. So, think of Ted’s well-deserved promotion formalizing how we already run the business today,” he said.

Key numbers

• Netflix added 10.1 subscribers during the quarter, its highest ever addition in the second quarter. Total subscribers has touched nearly 193 million.

• Added 2.66 million subscribers in the Asia-Pacific region

• Revenue jumped 25% to $6.1 billion.

• Netflix expects to add 2.5 million subscribers and clock $6.33 billion revenue in Q3

Twitter hack after-effects

More details have emerged on Twitter’s biggest security breach so far.

About 130 accounts were targeted in this incident, although there is no evidence that attackers were able to access passwords of these accounts, the company said.

Meanwhile, the US Federal Bureau of Investigation (FBI) has launched a probe into this hack that compromised the platform’s most popular accounts including Barack Obama, Jeff Bezos, Elon Musk, Kanye West, Kim Kardashian, and Joe Biden, according to a Wall Street Journal report.

Several cybersecurity experts had earlier raised concerns over this incident, saying this breach could have dire consequences in terms of user trust, especially since several government leaders and celebrities use this platform to make public statements.

So who is responsible for the hack? While Twitter is still investigating the matter, prominent security researcher Brian Krebs reported that the attack was likely perpetrated by a community of “SIM swappers”

Meanwhile, Google has temporarily dropped the prominent Twitter carousel from its search results, following this hack. “We can confirm we have temporarily removed the Twitter carousel from Search following Twitter’s security issues. Before restoring the feature we will carry out a careful review,” a Google spokesperson told Search Engine Land.

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(Illustrations and graphics by Rahul Awasthi)