Tough times in the e-commerce sector seem to have claimed another victim, Tolexo, an online marketplace for business goods and supplies.
It is reportedly letting go of 300 employees, around 85 per cent of its work force, due to slowing business after demonetisation, sources said. However, the senior management says this is untrue and that they do not even have that many staffers.
However, sources insist the layoffs started after a 'town hall' meeting last week, in which the employees were told about the slump in company performance.
The company is apparently shutting down its online operations and would focus on a new, completely offline, product. However, the Tolexo senior management said only the retail side of the operations are being shut.
"Last week, we had a town hall meeting in which the CEO told us that post demonetisation, our sales have drastically gone down and operations would considerably shrink. While around 30 to 35 people have been shifted to IndiaMART, the rest have been asked to leave," said a senior employee. The company is apparently giving only a month's pay for severance.
On being asked, the company denied mass layoff. "We have only shut down some operations. We do not have 350 employees; our staff strength is around 250. Yes, some people have been asked to leave but there are no mass layoffs," the company representative said.
Before demonetisation, said a senior executive, Tolexo had a daily gross merchandise value (GMV) of Rs 25 lakh; after the note ban, this went down to around Rs 10 lakh a day. "The company had also set aggressive targets, which it was unable to fulfill. So, finally, the investors told the co-founders to cut down on manpower cost. The company is working on a new business model of importing directly from China, rebranding it and selling offline," said a senior executive.
Sources add that Tolexo is in the process of returning the inventory to its sellers and has given notice to its warehouse partners that it would be vacating space. It is only fulfilling its existing order sheet, not taking new orders.
Tolexo provides a consumer shopping experience for the largest collection of products needed by businesses, factories, offices and laboratories. The platform provides technology and services that enable selection, payments, customer support, etc. It had company claimed to have built a collection of 1,000,000-plus products in a short span, serving more than 900 cities and towns across India.
