Simpl, a well-known Buy Now, Pay Later (BNPL) firm, has announced its second wave of layoffs in a month, affecting around 30 people. This move followed a May layoff of approximately 160 employees, which mostly targeted high-paying positions in engineering and product areas. Simpl is going through a difficult period, highlighted by significant capital burn rates and slowed user acquisition.
The layoffs affect a variety of divisions, including mid-senior management, with four Vice Presidents leaving from their positions: Ashwini Ravindranath, Vatsal Jain, Ramkumar Narayanan, and Anoop Saurabh. The founder informed department chiefs of the decision in a call on June 6, and the process began that same day.
“We routinely review our businesses to improve efficiencies, become more agile and leaner, and drive consistent growth,” stated Ashish Kulshrestha, Simpl’s Head of Communications. “Over the last few years, we have scaled our business exponentially, and in order to sustain this growth, we have undertaken a series of measures to improve operational efficiencies.”
The impacted employees will be given a severance package that includes a fixed salary for the two-month notice period as well as additional compensation equal to 15 days’ salary for each year of service. This comprehensive support attempts to mitigate the impact of layoffs on affected employees.
Simpl’s financial difficulties have grown in recent years. During FY23, the company’s net loss climbed by 147% to Rs 356.6 crore, while operational revenue increased by 176% to Rs 87.3 crore. Employee benefit expenditures increased by 3.5 times to Rs 139.2 crore during the same period.
The company’s post-pandemic over-hiring strategy, which aimed to grow its checkout network business into the D2C segment, has failed to produce the promised outcomes, resulting in flat business performance since last year. This is technically the third round of layoffs, as a group of employees were let go at the end of March and early April following performance appraisals.
The BNPL industry in India is under rising strain as a result of the Reserve Bank of India’s strict supervision. ZestMoney, another BNPL company, ceased operations in December 2023 due to regulatory uncertainties and unsuccessful attempts to resuscitate its business, resulting in the layoff of approximately 150 people.
Simpl, founded in 2016 by Nitya Sharma and Chaitra Chidanand, has over 49 million transactions and over 7 million users. Despite obtaining over $70 million in capital from investors like IA Ventures and Green Visor Capital, the company is now aiming for profitability by mid-2025.
As the BNPL industry evolves, organizations like Simpl must adjust to regulatory changes and market conditions, balancing growth with operational efficiency to maintain long-term viability.
