NewsBytes
    Hindi Tamil Telugu
    More
    In the news
    Mukesh Ambani
    WhatsApp
    Reliance Jio
    OPPO
    Vivo
    Sensex
    Bitcoin
    NewsBytes
    Hindi Tamil Telugu
    NewsBytes
    User Placeholder

    Hi,

    Logout


    India Business World Politics Sports Technology Entertainment Auto Lifestyle Inspirational Career Bengaluru Delhi Mumbai Visual Stories Find Cricket Statistics Phones Reviews Fitness Bands Reviews Speakers Reviews

    Download Android App

    Follow us on
    • Facebook
    • Twitter
    • Linkedin
     
    Home / News / Business News / GoMechanic fires 70% of its workforce; financial books under scanner
    Business

    GoMechanic fires 70% of its workforce; financial books under scanner

    GoMechanic fires 70% of its workforce; financial books under scanner
    Written by Dwaipayan Roy
    Jan 18, 2023, 03:47 pm 3 min read
    GoMechanic fires 70% of its workforce; financial books under scanner
    Around 500 employees have been laid off (Photo credit: GoMechanic)

    Automobile after-sales service start-up GoMechanic has fired roughly 70% of its workforce or around 500 employees. The company has also owned up to errors in financial reporting, and its accounts will be audited by a third party. The Gurugram-based firm was recently in talks to raise funds to the tune of $75-80 million, but the agreement has been called off.

    Why does this story matter?

    • Venture capital firm Sequoia Capital cannot catch a break. GoMechanic is the fourth firm backed by it to be accused of financial irregularity. Others include BharatPe, Trell, and Zilingo.
    • In the end, it is the employees who face the brunt of the management's misadventures.
    • Last year, 18,000 workers employed at Indian start-ups were laid-off. Now, in January 2023, GoMechanic is adding to the tally.

    Current staff to work without payment for next three months

    GoMechanic's job cuts have hurt employees across all departments. However, on-ground staff members were most affected. The company has directed the remaining staff to work without payment for the next three months. Meanwhile, those laid off by the start-up have been told that they would be "called again if things get back to normal." This seems like wishful thinking at best.

    Did GoMechanic under-report figures?

    Sequoia Capital, GoMechanic's biggest investor is auditing the books over financial irregularities. As per an Inc42 report, GoMechanic has a 'market pendency' of Rs. 40 crore and loans worth Rs. 120 crore. It is absolutely necessary for the company to raise funds in the 'next few months.' Separately, Moneycontrol has reported that GoMechanic showed overinflated numbers and fictitious garages to its investors.

    GoMechanic will look for "capital solutions"

    GoMechanic co-founder Amit Bhasin has admitted that there were errors in the company's financial reports. "We made grave errors in judgment as we followed growth at all costs, particularly in regard to financial reporting, which we deeply regret," he mentioned in a LinkedIn post. Bhasin also added that the start-up would be on the lookout for "capital solutions." However, their nature remains undisclosed.

    A timeline of GoMechanic's fundraisers

    In June 2021, GoMechanic raised $42 million in Series C funding at a valuation of $325 million. The round was led by Tiger Global. In early 2022, a similar funding round at a valuation of $1-1.2 billion was planned but was later canceled. Now, the latest round led by SoftBank to raise $75-80 million at a $600-650 million valuation has been called off.

    Indian start-ups are facing the brunt of funding winter

    GoMechanic is not the only start-up to embark on an employee purge. Companies such as Rebel Foods, Dunzo, Ola, Skit.ai, Mohalla Tech, and Cashfree Payments, have also taken similar steps. The Indian start-up ecosystem is facing the brunt of adverse macroeconomic conditions and funding winter. Ultimately, it is the workers who are staring at unemployment due to job losses.

    Share this timeline
    Facebook
    Whatsapp
    Twitter
    Linkedin
    Latest
    Startups
    Indian Startups
    SoftBank Group

    Latest

    Union Budget 2023-24: Key announcements for women Union Budget
    Here's how you can rock the metallic makeup look Makeup
    Union Budget 2023-24: Key takeaways for the Indian auto industry Union Budget
    WFH: How to balance your professional and parental duties Children

    Startups

    BharatPe paid founder Ashneer Grover Rs. 1.7 crore in FY22 BharatPe
    Two ShareChat founders step down soon after layoffs: Here's why Google
    Swiggy fires 380 employees amid 'challenging economic conditions' Swiggy
    Meet Beatoven.ai, the AI that can create original, royalty-free music Artificial Intelligence and Machine Learning

    Indian Startups

    Social e-commerce start-up DealShare raises $11 million in Series-A round India
    HR tech start-up Greytip raises $4.87 million from Naukri's parent India
    Five start-ups that are changing the lives of rural India India
    Swiggy raises $1bn in its largest funding round yet India

    SoftBank Group

    SoftBank's investment in India falls 84% to $500mn in 2022 SoftBank Vision Fund
    Who is Vishal Garg, who fired 900 employees over Zoom? New York City
    Microsoft partners with GM, invests $2bn in self-driving start-up Cruise Microsoft
    Hike messaging service shuts down, leaves app stores Twitter

    Love Business News?

    Subscribe to stay updated.

    Business Thumbnail
    Indian Premier League (IPL) Celebrity Hollywood Bollywood UEFA Champions League Tennis Football Smartphones Cryptocurrency Upcoming Movies Premier League Cricket News Latest automobiles Latest Cars Upcoming Cars Latest Bikes Upcoming Tablets
    About Us Privacy Policy Terms & Conditions Contact Us Ethical Conduct Grievance Redressal News News Archive Topics Archive Download DevBytes Find Cricket Statistics
    Follow us on
    Facebook Twitter Linkedin
    All rights reserved © NewsBytes 2023