Bengaluru/Mumbai: Third-party logistics startup Ecom Express has laid off at least 500 employees and put on hold its plans for an initial public offering of its shares as it attempts to trim costs, two people familiar with the matter told Mint. The company’s expenses increased slightly to ₹2,921.5 crore in FY24 from ₹2,902.8 crore in FY23.
“Over 500 people are expected to be laid off over the week and the company has already closed more than 3,000 pin codes, 1,000 DCs (delivery centres) and 20 major hubs that are in the process of closing,” one of them said. “The HR has called individuals, asking to resign immediately.”
Ecom Express had about 15,600 employees and associates, and delivered goods to more than 27,000 pin codes, as per the company’s website.
The company has paused its plans to go public due to volatile market conditions, the second of the two persons said.
On the layoffs, Ecom Express told Mint in a statement that it was “an ongoing process based on business needs and requirements from time to time”.
Ecom Express faces a stiff challenge from rivals such as Delhivery Ltd and XpressBees, which have their own fleets and also offer other services, including business-to-business logistics.
With many of these players also competing in the business-to-consumer e-commerce logistics arena, a price war has broken out, sparking speculation of a consolidation, or acquisitions, in the industry.
Additionally, online shopping platform Meesho’s in-house logistics arm, Valmo, also poses a challenge to Ecom Express’ volumes and revenues.
For 2023-24, Ecom Express reported a 2.2% growth in revenue to ₹2,609.2 crore and narrowed its loss to ₹255.8 crore from ₹428.1 crore in the year before.
In contrast, Delhivery reported last week that its revenue from operations in the December quarter (the third quarter of 2024-25) grew 8% from a year earlier to ₹2,378 crore while its profit after tax zoomed 114% year-on-year to ₹25 crore.
Also read | Can Ecom Express’s IPO succeed when Delhivery’s stock has failed to deliver?
IPO on hold, not shelved
Ecom Express in August filed papers to raise ₹2,600 crore in an IPO, which was to include a fresh infusion of ₹1,284.5 crore worth of shares and an offer-for-sale to allow some of its prominent investors such as Warburg Pincus and British International Investment planned to offload some of their stake.
The company intended to use the proceeds for scaling up its business and expanding its network infrastructure. Ecom Express had also said it would invest in its logistics and supply chain operations, hardware and software solutions, data sciences, and product innovation, among other things.
While these plans have not materialized, the company has not completely shelved its IPO plans and might pursue a public listing later in the year, the second person mentioned above said.
Ecom Express has raised around $324 million across 12 rounds from investors, according to data from market intelligence provider Tracxn.
Founded in 2012 by Manju Dhawan, K. Satyanarayana, T. A. Krishnan and Sanjeev Saxena, the company caters to e-commerce marketplaces, platforms, direct-to-consumer or D2C brands, and small and large online sellers. In 2023, the company picked former head of Bharti Airtel Ltd’s enterprise arm, Ajay Chitkara, as its chief executive officer.
Also read | Delhivery is gradually finding its feet amid rising competition