Chennai-based WayCool Foods specializes in agriculture supply chain management and has been hit hard by a series of layoffs in recent months. It has fired more than 200 employees in its third round of layoffs within a year. The situation reveals a troubling trend of financial instability and operational challenges among startups.
The sequence of layoffs started in July 2023. The first layoff was of more than 300 employees. The second round of terminations was in February and impacted 70 staff members. The company is finding tough to manage resources. The latest round of layoffs has affected employees from Chennai, Bengaluru and Hyderabad. Its subsidiaries CensaNext and BrandNext have also been affected.
The series of layoffs is a part of a broader crisis within the company. It is learned through sources that the financial woes of the startup have intensified. Salaries have been delayed and payments from clients are being stuck. The difficulties are not limited to just the workforce. Vendor relationships have also been in crisis. Payments to millers, logistics partners and service providers have been erratic. A complete halt has been witnessed in vendor payments since June. This has worsened the situation further.
The response of WayCool to the crisis are streamlining of operations and simplifying roles. It is focusing on profitability through automation and some structural changes. The company acknowledged that the process is ongoing and the crucial steps are necessary for survival. However, the series of layoffs as well as the ongoing financial issues suggest a deeper problem.
Many are concerned about the long-term viability of the company amid frequent layoffs. It is true that WayCool is mainly focusing on achieving profitability, but the impact on employees and vendors cannot be ignored.
