Info-tech

4,000 lose jobs as AskMe shuts down

Press Trust of India New Delhi | Updated on January 17, 2018 Published on August 21, 2016

Major investor Astro threatens audit of parent firm Getit

Hit by a cash crunch, e-commerce company AskMe has decided to shut shop, leaving 4,000 staffers jobless, while its majority investor Astro said it will appoint a forensic auditor to review the books of the start-up’s parent firm Getit.

In an internal mail, Anand Sonbhadra, Group CFO, Getit Infoservices, directed senior staff to take certain steps to ensure prevention of “further liabilities” given the company’s “current financial situation”.

“Prevent any further creation of liabilities by suspending operational activities...Temporarily, close all hubs and all offices as possible,” he said.

Noting that the non-payment of salaries to delivery boys and lower staff may cause them to take “inappropriate actions” at hubs, Sonbhadra said any untoward incident needs to be prevented and assets at hubs need to be protected.

The decision will leave 4,000 employees jobless across about 40 centres.

Intense pressure

With investors tightening their purse strings in an increasing volatile market, start-ups are now under intense pressure to perform and become profitable.

The last few months have seen a spate of lay-offs by companies such as Flipkart, Snapdeal and Ola. According to sources, most employees at AskMe have not received their salaries for July, while reimbursements for bills have not been cleared for the past many months.

The pink slips come amid a spat between the Malaysian investor Astro Entertainment Networks Ltd (AENL) and management of Getit.

“Unfortunately, Getit has not been able to make its business profitable and sustainable despite these huge investments by AENL.

An independent review by advisors has concluded that there is little prospect for turnaround and the business is insolvent,” AENL said.

Published on August 21, 2016

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