GoMechanic Layoffs: Company Fires 70% Of Staff Citing ‘Errors In Judgment’; A Third Party Firm To Perform The Audit
January 20, 2023: New Delhi: A six-year-old automobile after-sales service startup on Wednesday became the latest company to issue pink slips to its employees.
After Indian startups like ShareChat, Dunzo announced job cuts, GoMechanic will lay off 70 percent of its workforce.
This comes after SoftBank allegedly pulled out capital in the startup after due diligence (DD) highlighted glaring loopholes in the company’s accounts and operations.
The investment was being handled by DD EY India, which flagged issues such as hypothetical garages, preferential payments to specific garage units and overall increased revenue and user metrics at the company, the Economic Times said citing people familiar with the matter.
Now facing capital problems, GoMechanic on Wednesday decided to lay off employees along with co-founder Amit Bhasin. “As entrepreneurs, we identify problems, find solutions, and explore every opportunity to develop those solutions to meet unmet needs,” he said. However, Bhasin admitted that he was carried away.
Our passion to survive and manage capital got the better of us from the sector’s internal challenges and we made mistakes in judgment as we pursued growth at all costs, including financial reporting,” he said in a detailed post on LinkedIn.
Job cuts at GoMechanic
GoMechanic, which was founded in 2016 for people looking for a better car repair experience and has served over 7 lakh customers, will say goodbye to 70 percent of its workforce.
“We take full responsibility for this current situation and have unanimously decided to restructure the business while we look for capital solutions,” Bhasin announced.
Blaming himself, Bhasin said, “We made lapses in judgment as we pursued growth at all costs, including in terms of financial reporting, which we deeply regret.” In addition, a third-party firm will audit the business.
While the situation for GoMechanic is far from what we could have ever imagined, Bhasin said they are working on a plan that will be most practical under the circumstances.
“It was our conscious commitment to provide a convenient, affordable and reliable experience that helped us win the trust and hearts of our customers.
We were fortunate to have the support of a large number of investors in this journey. We have come a long way, from starting with a few hundred customers and rapidly expanding our business to serving over 7 lakh customers so far,” the co-founder wrote.
Meanwhile, news portal The Morning Context reports citing sources that the Gurugram-based startup has requested the remaining employees to labor for free for three months. GoMechanic has presence in more than 30 cities with more than 600 garages.
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