WayCool implements second round of layoffs in a year, citing restructuring

WayCool Foods layoffs: Chennai-based agritech startup WayCool Foods has initiated a second round of layoffs, affecting approximately 70 employees across various departments. According to sources cited by Inc42, the affected departments include sales, research, marketing, and technology. Additionally, the startup has reportedly closed down its warehouses over the past month.

The decision comes amid WayCool's alleged inability to secure fresh funding rounds over the last two years, as per the report. 

Responding to queries from Inc42, a spokesperson from WayCool confirmed the layoffs but refrained from disclosing the exact number of impacted employees. The spokesperson attributed the layoffs to the company's strategic shift towards investing in its brands to leverage its efficient supply chain.

"Over the past year, WayCool Foods has focused its investment behind its own brands to capture the benefit of its efficient supply chain to the fullest. Our brands have achieved significant scale, enabling us to build a direct, warehouse-free supply chain from source to market. Hence, we have rationalised the warehouse footprint, resulting in some redundancies," the spokesperson stated.

The spokesperson further highlighted that this strategic shift has contributed to a significant reduction in EBITDA loss by over 80 per cent, positioning the company to achieve EBITDA profitability in Q1 FY25. Despite the layoffs, several business units within WayCool have reportedly already turned EBITDA positive for several months.

Last year, WayCool undertook a similar restructuring exercise, laying off around 300 employees in July in a bid to achieve profitability. This move was part of the company's efforts to extend its financial runway amidst funding challenges.

WayCool, which launched its FMCG entity BrandsNext last year, is yet to file its financial statements for FY23 with the Ministry of Corporate Affairs. However, reports suggest that the company has managed to curtail expenses by 60 per cent since October 2022 and aims to close FY23 with a revenue of Rs 1,700 crore.

In FY22, WayCool witnessed a substantial increase in net loss, which surged 142 per cent year-on-year to Rs 360.5 crore, despite a significant rise in operating revenue. Since its inception, WayCool has raised approximately $300 million in funding and boasts a roster of notable backers, including Lightrock, Lightbox, Lightsmith, 57 Stars, and FMO.