Bengaluru, India-based interior design startup Livspace has laid off 15 percent of its workforce in India, or 450 people, the company confirmed to Crunchbase News.
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“As a result of the COVID-19 pandemic, Livspace has experienced a sudden and unexpected impact on its business in India,” the company said in a statement. “While our business fundamentals and outlook remains strong, in response to COVID-19, we are steering the company in a more focused and leaner direction in line with our future strategy.”
Livspace connects people to designers, services and products so they can undertake renovations like kitchen upgrades or repainting a room.
There are no plans for layoffs at the company’s Singapore operation, which was rolled out last year, according to the statement.
Employees who were notified Monday were given the option of taking a one month gardening leave, according to a former employee.
Livspace, which is based in Bengaluru, had more than $157 million in funding and was backed by firms including Goldman Sachs, TPG Growth and IKEA. The company last raised a $60 million Series D in January.
“Letting go of our employees who have helped all of us build this company into the dominant player in our industry is one of the most difficult decisions that we had to take,” CEO Anuj Srivastava said in a statement.
Sources from the company told Crunchbase News that Livspace reduced compensation prior to layoffs. A company spokeswoman said that Livspace founders took a 70 percent pay cut for their annual salary and the leadership team offered to forgo their entire variable salary for the year.
“For all employees, the company introduced a success-based variable pay i.e. their CTC [cost to company] was preserved and only the variable component was increased (which was directly linked to individual success metrics). From an annual payment cycle, the variable payment cycle was changed to either monthly or quarterly, based on the role. This measure was taken to help employees with cashflow,” she said.
The company spokeswoman denied that Livspace promised employees that changes to compensation would prevent layoffs, and added that layoffs were a last resort.
Illustration: Dom Guzman