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GoMechanic co-founder admits financial misrepresentation; to lay off 70% of staff

GoMechanic co-founder admits financial misrepresentation; to lay off 70% of staff
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GoMechanic’s Bhasin did not mention if the affected workforce would get any severance packages or not.

 

Co-founder of GoMechanic Amit Bhasin on Wednesday admitted financial misrepresentation by the company. He added that the Indian automobile after-sales service startup would let go of around 70% of its workforce as a part of a restructuring process.

 

In a LinkedIn post, Bhasin admitted that the founders of GoMechanic “got carried away” in the quest to explore growth opportunities. “Our passion to survive the intrinsic challenges of this sector, and manage capital, took the better of us and we made errors in judgment as we followed growth at all costs, including in regard to financial reporting, which we deeply regret,” he wrote.

 

“We take full responsibility for this current situation and unanimously have decided to restructure the business while we look for capital solutions,” he said, adding that a third-party firm will be conducting an audit of the business.

 

Bhasin, however, did not mention if the affected workforce would get any severance packages or not. Reportedly, approximately 700 employees will be affected by the restructuring, and the remaining employees are asked to work without pay for the next three months.

 

GoMechanic is not the first Indian startup to lay off employees. Earlier this week, Indian social media startup, ShareChat also laid off 20 percent of its workforce. Google and Twitter-backed company said it needs to let go of its employees as it prepares to sustain “several external macro factors that impact the cost and availability of capital.”

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