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Simpl, a well-known fintech startup specializing in Buy Now Pay Later (BNPL) services, has recently implemented a significant reduction in its workforce. This move involved laying off more than 100 employees across various departments and roles. The decision to downsize the workforce was made due to the company facing increased financial challenges, including a higher monthly cash burn rate and a slowdown in acquiring new users.
Founder and CEO Nityanand Sharma personally communicated the decision to the employees through a town hall meeting. Sources familiar with the matter have disclosed that the layoffs primarily affected employees in higher-paying positions, such as those in engineering and product development. The impact of the layoffs extended to different areas within Simpl, including core operations, interns, calling agents, and the D2C checkout vertical.
These layoffs are part of Simpl’s broader efforts to reduce costs and enhance operational efficiency, with the ultimate goal of achieving profitability. Although the decision was undoubtedly difficult, Simpl remains dedicated to supporting the affected employees by providing assistance with outplacement and job search endeavors.
Not for the first time…
Not for the first time, Simpl has implemented a downsizing initiative, marking the second round of layoffs in consecutive years. This decision comes after a similar workforce reduction in March 2023, despite previous assurances of no further layoffs. The company deemed it necessary to streamline its workforce due to evolving business dynamics.
Why is layoff necessary?
The necessity of layoffs is underscored by Simpl, who emphasized that these measures are crucial for improving operational efficiencies, cutting fixed and overhead costs, and ultimately expediting the path to profitability. Ashish Kulshrestha, the Head of Corporate Communication at Simpl, reaffirms the company’s dedication to creating shared value for merchants and customers amidst the challenging landscape.
The timing of these workforce reductions aligns with the heightened regulatory scrutiny faced by BNPL credit startups in India, as the Reserve Bank of India tightens regulations. The closure of ZestMoney, another BNPL startup, in December 2023 further highlights the challenges within the industry.
Despite the challenges faced, Simpl maintains a strong presence in the BNPL sector, with partnerships with more than 26,000 merchants, such as Zomato, MakeMyTrip, Big Basket, and Crocs. The company is dedicated to enhancing its services, like the introduction of Bill Box, enabling customers to pay bills in three installments.
Founded in 2016, Simpl has secured substantial funding, including a $40 million Series B funding rounds in 2021 led by Valar Venture IA Ventures. Despite recent workforce adjustments, Simpl remains committed to its goal of offering innovation financial solutions and creating value for its stakeholders in rapidly changing industry environment.
How does Simpl work?
The online marketplace developer focuses on purchase financing, allowing users to make online purchases and pay in customized periodic installments. Users are provided credit limits based on their history with merchants, spending habits, and timely repayment. Moreover, the company offers an app-based platform for tracking purchases, upcoming payments, and account activity. Formerly known as Get Simpl the company was founded in 2016 and is located in Bengaluru, India.
Rise in layoffs of tech companies in 2023-2024
In 2023, the tech industry saw a wave of layoffs, a trend that has continued into May 2024. Companies like Sony, Amazon, and Salesforce have already made significant workforce reductions.
Last year, major players such as Twitter, Tesla, Shopify, Microsoft, and Netflix also had to downsize their staff due to various reasons including the economic climate, over hiring during COVID, and the increasing use of AI
Some complaints attribute the layoffs to financial difficulties, while others are shifting towards automation with tools like ChatGPT and Google Gemini.
