WayCool Foods Axes 70 Employees in Second Restructuring Blitz Within a Year
- ByStartupStory | February 27, 2024
Chennai-based WayCool Foods has made significant workforce cuts in a recent attempt to steer the company towards profitability. Approximately 70 employees were laid off in the past month, marking the second round of layoffs at the agritech startup within a year.
The affected employees, spanning sales, research, marketing, and tech departments, faced termination as part of the company’s strategic move to streamline non-profitable verticals. In the last month, WayCool also closed its warehouses, reflecting a series of cost-cutting measures.
The absence of fresh funding for the past two years is cited as a driving force behind this restructuring initiative. Reports indicate that these strategic shifts have enabled WayCool to reduce its EBITDA loss by over 80%, positioning the startup to achieve EBITDA profitability in Q1 FY25.
Last year, WayCool initiated a similar restructuring exercise, leading to the layoff of around 300 employees in an effort to turn the company profitable. The agritech startup’s financial challenges were exacerbated by its failure to secure the anticipated funding of USD 50 million to USD 70 million at a valuation of approximately USD 900 million.
Despite the hurdles, WayCool remains optimistic about its financial outlook. The company has not yet submitted its financial statements for FY23 to the Ministry of Corporate Affairs, but reports suggest a 60% reduction in expenses since October 2022. WayCool aims to conclude FY23 with a revenue of Rs 1,700 crore.
In FY22, the startup witnessed a significant increase in net loss, soaring by 142% compared to the previous year, reaching Rs 360.5 crore. However, operating revenue experienced a notable growth, increasing 2.4 times to Rs 926.9 crore from Rs 382.3 crore in FY21.
WayCool has garnered a total funding of approximately USD 300 million to date, receiving support from investors such as Lightrock, Lightbox, Lightsmith, 57 Stars, and FMO.
WayCool Foods, in a statement, acknowledged the challenges and emphasized its commitment to achieving sustainable profitability. The company stated, “These strategic measures are essential for the long-term viability of WayCool Foods and will contribute to our goal of building a financially robust and sustainable agritech ecosystem.”
Investors and stakeholders are keenly watching the startup’s progress as it navigates the challenging landscape and strives to secure its position in the competitive agritech market.
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