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There is capital to save, a burn rate to decrease, and a certain resource to prioritise
Running a business possess its own challenges and obstacles that companies need to face in order to become sustainable and profitable. It is indeed not an easy feat; one that requires carefully weighted decisions, and also a bit of luck on the side. The same goes with running a startup, which possesses similar hurdles.
In the case of SaleStock Indonesia and Berrybenka, which recently laid-off several of its employees, there was a clear reason behind the decision: That there are things more urgent for businesses to maintain, that force them to let go their employees.
In terms of business operational, laying off employees is not an uncommon thing, especially in the case of startups. But the decision to lay-off a considerable number of staffs (40 people for Berrybenka and two hundreds for SaleStock) leaves plenty of questions to ask. What is actually happening to those two startups?
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We can conclude that everything is actually all right with these two businesses; they have not reached the stage where they are going to go bankrupt. It is simply a matter of re-arranging priorities. SaleStock, despite having just laid off hundreds of its employees, continues on hiring for developer positions.
There are many things that we can take from that. First is that they are still unable to secure follow-up funding, leading them to prioritise on certain resources and decrease their burn rate. Second is that the investors are likely to have pushed them to become more profitable, for example by using in-house customer service or by developing a private label that might optimised margin. With an operational budget set from the beginning, though they might feel reluctant about it, there is a number of employees with certain skillset that has to be “sacrificed.”
Berrybenka has not been seen opening a new job vacancy. There are only some openings for marketing internship and quality control leader, but what SaleStock did with opening new vacancies for developers indicates its focus on innovation.
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What happened to the two startups serve as a reminder for other startups. There has to be a carefully calculated allocation of fund as a growing startup needs to prevent overspending. As a tech startup, we can pretty much say that the only relatively safe position is as an engineer.
If a startup has started to let go of its engineers, now that means they have stopped innovating or are on the brink of death.
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The article Pelajaran yang Bisa Diambil dari Kasus Pengurangan Karyawan di Berrybenka dan Sale Stock Indonesia was written by Prayogo Ryza, with contribution by Amir Karimuddin, and was first published on DailySocial. English translation by e27.
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