Simpl Faces Another Round of Layoffs, Leaving Employees in Uncertainty

Simpl, the Buy Now Pay Later (BNPL) startup, has initiated a second round of layoffs affecting around 50 employees, including mid-senior management roles across various departments, according to sources familiar with the matter speaking to Moneycontrol. This move comes shortly after the Bengaluru-based fintech company laid off approximately 160 employees, mainly in engineering and product roles, as it grapples with elevated monthly cash burn and a slowdown in new user acquisitions.

A source revealed that the founder communicated the decision to department heads during a call on June 6, with the process commencing today. While some senior management members haven't been directly laid off, they've been encouraged to resign.

These ongoing layoffs are part of Simpl's efforts to cut costs and move towards profitability, as previously reported.

Talking about the recent layoffs, Ashish Kulshrestha, Head of Communications, Simpl said, “As an organisation, we routinely review our businesses to improve efficiencies and become more agile and leaner as an organisation to drive consistent growth. Over the last few years, we have scaled our business exponentially and in order to drive this growth in a sustainable manner, we have been undertaking a series of measures to improve operational efficiencies. Today’s decision to let 30 of our employees go is a continuation of our organisation-wide efforts to become a fiscally prudent company and achieve profitability by mid-2025.”

In the financial year 2023, Simpl witnessed a 147 percent increase in net loss to Rs 356.6 crore, despite a 176 percent surge in operating revenue to Rs 87.3 crore.

Simpl Layoff: Not the first time.. 

This isn't the first instance of Simpl resorting to mass layoffs. Despite its prominent position in the fintech landscape, Simpl announced the termination of at least 100 employees in May 2024 too. It was predominantly from vital departments such as engineering and product development. This move comes amidst reports of sustained high monthly cash burn and a notable deceleration in new user acquisitions, raising questions about the company's fiscal sustainability.

This is not it, in a déjà vu moment for its workforce, the company had axed around 160-170 employees just over a year ago. Promises of no further layoffs then ring hollow now, especially as the latest wave of terminations affects both seasoned employees and newcomers, some of whom had barely settled into their roles.

Simpl's woes compound as regulatory scrutiny intensifies in India's BNPL sector. The recent shut down of BNPL startup ZestMoney due to regulatory uncertainties serves as a cautionary tale, leading to more fintech layoffs. With the Reserve Bank of India tightening its oversight, fintech players like Simpl find themselves navigating treacherous waters, where missteps could spell disaster.

Amidst these upheavals, Simpl continues to serve a vast network of over 26,000 merchants, including industry giants like Zomato, Makemytrip, and Big Basket. However, its recent internal turmoil underscores the precarious nature of the BNPL landscape, where success hinges not just on innovation but also on navigating regulatory complexities and ensuring financial resilience.

Global Layoffs

As Simpl's layoffs grab headlines in the fintech realm, it's essential to recognize that this distressing trend isn't confined to a single company or industry. Across the globe, from multinational corporations to burgeoning startups, layoffs have become an unfortunate reality. Even tech giants like Google and renowned accountancy firms such as KPMG, PwC, Deloitte, and EY have recently announced workforce reductions.

While fintech layoffs stem from financial constraints, a new narrative emerges in the tech sector—the ominous "AI Conspiracy Theory." TICE's thorough investigation into this theory sheds light on how these corporate behemoths justify their actions under the guise of technological progress.

For an in-depth exploration of tech layoffs and the underlying conspiracy, delve into our investigative piece here - Layoffs At Google: What is the AI Conspiracy Theory?

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