Exotel Layoffs: What Happened & Why?

On January 17, 2023, Exotel laid off 142 employees, representing 0.15% of its workforce. This move has raised concerns within the company and the industry.

Headquartered in Bengaluru, Exotel operates in the Support industry. The layoffs come amid broader industry challenges, reflecting the company's need to adapt to changing market conditions.

Why did Exotel have Layoffs?

Exotel decided to lay off 142 employees due to poor performance and a revision in its Performance Improvement Plan (PIP) policy. Additionally, the economic slowdown and the need for business restructuring contributed to the decision.

• Poor Performance: Employees who did not meet performance standards were terminated following a revision in the PIP policy.
• Policy Revision: The PIP policy was revised in November 2022, removing the clause of giving two warnings for below-par performance.
• Business Restructuring: The company needed to restructure its operations to adapt to changing market conditions.

Company Statement

"In the model today, there is no appetite for risk. We should land up at INR 44 Cr loss along with a 15% salary hike provided we execute a 142 people PIP plan correctly." — Shivakumar Ganesan, Exotel cofounder and CEO.

This statement underscores the financial pressures Exotel is facing, necessitating the layoffs as part of a broader strategy to manage costs and improve efficiency. The revised PIP policy, which now initiates the notice period immediately upon being put on PIP, reflects the company's urgent need to address performance issues and streamline operations.

Impact on Workforce and Industry

The reduction of 142 employees at Exotel has significantly impacted its workforce, particularly in departments such as customer support and sales. This downsizing may lead to increased workloads for remaining employees and potential disruptions in service delivery.

In the broader industry, other companies in the support sector, like Freshworks and Zendesk, have also announced layoffs recently. These trends reflect a challenging economic environment and a shift towards more streamlined operations across the industry.

Looking Ahead

The layoffs at Exotel indicate a strategic shift towards greater efficiency and cost management. Moving forward, the company aims to stabilize its operations and enhance its market position.

• Focus on Core Competencies: Exotel plans to concentrate on its primary strengths in customer support technology to drive growth.
• Investment in Automation: The company will invest in automation tools to improve productivity and reduce operational costs.
• Enhanced Employee Training: Exotel intends to provide more comprehensive training programs to ensure remaining employees are well-equipped to handle increased responsibilities.

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