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Facing Financial Crunch, Urban Ladder Cuts Work Force By 25 Per Cent, Hopes To Turn Profitable
The company believes that it would become profitable at EBITDA (Earnings before interest, taxes, depreciation, and amortisation) aiming for Rs 8 to Rs 10 crore.(image via Urban Ladder/Facebook)
Furniture retailer Urban Ladder has issued pink slips to around 25 per cent of its existing workforce in the quarter that ended in March. As per a statement from the company’s CEO, total number of individuals on its payrolls has come down from 957 to 711. Of the totally layoffs, 90 employees from the head office were asked to leave.
The company, struggling to raise funds and turn profitable, has carried out the layoffs across levels, functions and geography, the Hindu Business Line reports.
The layoffs are the second such by the company after 2016. Speaking on the same Ashish Goel, co-founder and CEO said “We had no other option. We would have shut down if we hadn’t asked them to leave”.
Urban Ladder turns seven next month and recently seen a series of resignations from its top executive brass. Ajit Joshi who was hired as president and COO in July 2017 resigned in March 2019 citing personal reasons. Other top executives from operations and supply chain, product, engineering and sales have also resigned.
The company for the fiscal year 2018 recorded revenue of Rs 204.7 crore, up from Rs 101.9 crore the previous year, Losses in FY 18 were recorded at Rs 117.3 crore, much better than FY 17, when the Ratan Tata-backed company registered Rs 459.1 crore loss.
The retailer faces tough competition from Pepperfry which has 45 retails stores across India against its 11 stores, and the entry of IKEA into the $18 billion Indian furniture market is only making it difficult for the company.
The company believes that it would become profitable at EBITDA (Earnings before interest, taxes, depreciation, and amortisation) aiming for Rs 8 to Rs 10 crore.
Update: It was earlier reported that 40 per cent of Urban Ladder’s workforce had been laid off. The company has since then clarified that it has made a 25 per cent cut in its workforce.
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