Chargebee, which operates a software-as-a-service (Saas) based subscription management platform, has become the latest Indian unicorn to lay off employees amid tough macroeconomic situations.
The company has laid off around 10% of its workforce or 142 employees to tackle the ongoing macroeconomic challenges as well as reduce the debt it has accumulated in the last few years, Chargebee cofounder Krish Subramanian said in a late night LinkedIn post.
In a letter shared with the Chargebee’s team, Subramanian highlighted how companies globally are prioritizing profitability and reducing expenses.
“At the start of Q2, macroeconomic factors began impacting public companies and the financing environment. As you know, we changed our hiring plan to align with priorities and started implementing stricter fiscal discipline to reorient the company towards long-term sustainability. Since then, the global economic environment has continued to be uncertain - but it is clear that this new reality will require companies to move toward profitability at an accelerated pace,” he said.
The Chennai and San Francisco-headquartered startup will provide three months of pay and extended medical benefits to the impacted employees as they look for new opportunities.
In 2022, public markets have been severely impacted, which has led to a cash crunch into the private markets. Concerns about inflation, rising interest rates, and geopolitical events are adding to the woes of startups globally.
After years of chasing growth over profitability, companies are now focusing on sustainable growth and are becoming more mindful of their expenses. As a result, a large number of public and private tech companies are laying off workers, cutting down on employee expenses.
“While we can’t predict the future, the decisions made for this weeks restructuring are to best position the company for long-term success. Today’s actions are a result of extensive planning to avoid additional impact and to offer impacted employees a generous severance,” a company spokesperson said when asked whether there will be more layoffs at the company in near future.
Founded in 2011 by Subramanian, Saravanan KP, Rajaraman Santhanam and Thiyagarajan T, Chargebee offers billing, subscription, and revenue management solutions, to startups and larger enterprises.
Early this year, Chargebee had raised $250 million in a funding co-led by Tiger Global Management and Sequoia Capital. The round multiplied the company’s valuation by 2.5 times to $3.5 billion. To date, the company has raised $470 million.
“While we are positioned well for the future in the long term given our market opportunity and financial position, we are in the unfortunate situation where we have to make corrections to our scale and structure to build a more efficient, stronger organization for the future,” Subramanian said.