Gaurav Choudhary, the 24-year-old co-founder of TinyOwl, was kept under ‘office arrest’ at Pune for over two days by employees the start-up laid off in an ongoing retrenchment process. He has somehow managed to leave the office.
The crisis at TinyOwl began with its first layoff in September in which the start-up offloaded around 160 employees.
On October 30 Harshvardhan Mandad, another co-founder, confirmed that the company had raised Rs.50 crore funds for restructuring.
But on November 3, TinyOwl laid off 112 employees in Pune, Gurgaon, Chennai and Hyderabad.
Immediately after this, laid off employees at Pune held Choudhary hostage in office demanding immediate payment of their dues.
He said he cannot do that.
The main grievance of the laid off employees is not that they were laid off:
“TinyOwl was reportedly offering post-dated checks to them, which concerned them as previously laid-off employees had yet to receive their payment.”
According to Medianama, no one is happy about the post-dated cheque idea because despite the funding the money isn’t in the bank yet.
Employees have a series of allegations against TinyOwl:
- General managers with only 6 months of experience were hired and paid close to Rs.22 lakhs per annum.
- The start-up splurged recklessly and vendor payments are pending.
- The company had spent Rs.1 crore on marketing in one city for a month, across all 6 cities.
The situation in Pune was full of heat. Choudhary had to request the police to step in.
When local politicians entered the scene in Pune, things got a bit ugly.
One politician asked Choudhary this:
Just as he was responding to it, the politician uttered an expletive in Hindi.
Choudhary then quietly slipped back into a room in the background. You can watch this short video of the exchange of words between the politicians and Choudhary.
The politicians demanded TinyOwl pays one month’s salary and the rest of the amount as a post-dated cheque.
They told the company to bear Diwali expenses for its employees, too. According to them TinyOwl owed Rs.30 lakh to employees.
TinyOwl is not the only start-up in the food service business facing such a crisis.
Zomato, too, laid off around 300 of its approximate 3000 employees in October.
The Quartz reports that food start-ups used to receive high funding until the first half of this year but investors have now realized that it is a “flawed business”. But start-up founders opine that restructuring is a part of growth.