Bengaluru | New Delhi: Some Indian internet companies like Grofers, Zomato, UpGrad, and Ixigo have begun rolling back the salary cuts effected during the lockdown. Others like ecommerce platform Snapdeal, which are now operating at pre-Covid-19 levels, have rolled out increments and reinstated bonuses.
While the country’s economy has gradually begun to open up, albeit under a tight leash, the startups are beginning to reinstate the salaries that had been slashed in the April-June quarter. During that three-month period, a number of them had also issued additional employee stock options, in lieu of the salaries cut during the economic crisis.
Grofers confirmed salary restoration to ET. “We had (earlier) been conservative because of the uncertainty in operations… That seems to be stable now, so we reinstated salaries from July 1,” Albinder Dhindsa, co-founder of Grofers, told ET. The Gurgaon-headquartered online grocery delivery platform had furloughed about 50-70 employees in April.
Zomato CEO Deepinder Goyal’s July 10 blog post said original salaries have been restored, while online travel operator Ixigo restored salaries to pre-cutback levels from July.
“What we saw when the lockdown eased, and flights began to resume, initially there was pent up demand, and more than we anticipated. But as it began to settle, we saw demand would not go south of a particular level…From July, we decided to bring back salaries to the February level,” Aloke Bajpai, chief executive of Ixigo, said.
Snapdeal, effective June 1, rolled out increments for its approximately 700 employees. “We should do the right thing for the team,” Kunal Bahl, CEO of Snapdeal, told ET. However, the company didn’t disclose whether its furloughed employees, some of whom have been taken back, have benefitted or not.
In May, Snapdeal put about 7% of its full-time workforce on a three-month furlough, and did not renew contracts with a chunk of its estimated 800 contract employees, as reported by ET.
Employees at some firms that have restored salaries, however, continue to be sceptical. “These kinds of drastic changes in management decisions make us cautious about joining a startup,” said a person with a startup. There’s also dissatisfaction about Esops, which many staff say aren’t effective recompense for lost salaries.
Additionally, HR firms, employees, and industry observers are raising questions about hiring practices, stating that the events of the last quarter have made potential recruits wary of joining a startup at a later date.
It’s not all good news for internet firms. Oyo, Curefit, and Bounce among others have had recent job cuts. They operate in sectors that haven’t seen any demand increase, and are not expecting a bounce back in the short term.
Consultants told ET that many startups took the extreme step of downsizing sooner than expected, unlike other sectors like IT, where the pace of hiring and layoffs are more even.
“For a lot of startups, a slowdown is happening for the first time..and their reaction was more extreme,” said Anshuman Das, managing partner at Longhouse Consulting, an executive search firm.