Swiggy possible layoffs
This may sound like a dumb question, but why do these companies fire just before the IPO? isn't an IPO a good thing? More cashflow. Shouldn't they be taking care of their employees who made it reach there?
What exactly is the thought process behind this mass layoff before IPO?
Even with Swiggy news, there's Zomato
Their paid SEO game is crazy
Swiggy is the dark horse that is better than Zomato. Zomato is a sh** company running on InfoEdge fumes.
The whole point of IPO is to get filthy valuations. So to get it there are two ways :
- Become extremely high revenue and profit making business machine , which is not possible if you’re not like of Nvidia 🙂
- Cut cost 💲, every saving is worth equal earnings.
So company tend to do major cost cut before IPO to improve balance sheet on paper to get valuations (honestly what they don’t deserve)
During IPO every team is vulnerable if they aren’t directly contributing towards revenue generation.
In short, it makes line go up!
Companies after a certain stage only care about the elite "stake holders", CEO's role literally becomes maximise returns for these ~~leeches~~ holders. ~~Firing~~ Cutting costs increases the said returns, hence it's a popular strategy pre-IPO
When you go for IPO, all eyes are on you.
From zee business to CNBC, everyone will pick prospectus to dissect the cost elements. Easiest way for any company to reduce cost elements is by layoff and quick gains in the bottom line. Case in point is - Oyo! When they were trying to file for IPO, they literally went into maintenance mode (for some verticals), laying off majority of engineering & product talent. One of my close friends at a senior level had to move out for similar reasons.