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Monday, August 26, 2019
Cash-strapped Urban Ladder lays off hundreds of employees

40% of workforce given pink slips in Jan-March quarter. Omnichannel furniture retailer Urban Ladder has been trimming flab to sustain its operations, but its leadership team claims it is just a couple of months away from turning EBITDA (earnings before interest, tax, depreciation and amortisation) positive.

Industry sources as well as former Urban Ladder employees told BusinessLinethat the start-up let go of 40 per cent of its headcount in the quarter that ended in March.

Elusive profitability
Urban Ladder’s inability to raise more funding and a struggle to turn profitable were the major reasons cited by the management to the employees who were handed pink slips.

The layoffs, which were carried out across levels, functions and geographies, have brought the Ratan Tata-backed company’s headcount down to 700, said the sources, adding that this is the second time that Urban Ladder has resorted to job cuts after 2016.
Asked why the company resorted to a second round of layoffs, Ashish Goel, co-founder and CEO of Urban Ladder, said it was absolutely necessary. “We had no other option. We would have shut down if we hadn’t asked them to leave,” he said.

Top-level exits
A retail veteran of 30 years, Ajit Joshi, who was hired as President and COO in July 2017, is learnt to have resigned in March citing personal reasons. Other top executives, who were heading various functions, including Operations and Supply Chain, Sales and Marketing, Product, Engineering and HR, have also moved on.

Last year, the company had told BusinessLine it was close to raising $25 million. Goel said it may now no longer require the funds.

Refusing to comment on the number of employees fired, he said: “We have made more than our share of mistakes and have made some tough, painful decisions and gone through a reset from January to March. Now, we are on track to be profitable at the EBITDA level next month and our goal is to deliver ₹8-10 crore of EBITDA this fiscal. It’s not a big number, but it is a start.”

Urban Ladder, which will turn seven next month, doubled its revenue to ₹204.7 crore in FY18 from ₹101.9 crore in FY17. It pared losses from ₹459.1 crore in FY17 to to ₹117.3 crore in FY18, per its RoC filings accessed by paper.vc.

New outlets
The company notched up revenues of ₹345 crore net of cancellations and returns in FY19, Goel said. With 11 stores in Bengaluru and Delhi, offering products ranging from ₹2,000 to ₹1.5 lakh, the start-up plans to open stores in Chennai and Pune in six months.

Urban Ladder’s inability to raise funds from new investors since its last funding round 18 months ago is largely attributed to the new FDI rules in e-commerce, which make potential investors cautious. “With little or no resources to continue with operations till things played out, Urban Ladder was forced to resort to mass layoffs,” said one of the sources.

Tough rivals
The start-up has raised $112.8 million to date, compared to rival Pepperfry, which also turned seven this January and has raised $197.5 million to date. The latter has established over 45 experience stores pan-India.

The entry of Swedish furniture major IKEA, which recently invested in home interiors and renovation platform Livspace, has further toughened competition for Urban Ladder.

On his plans to raise more funds, Goel said: “At some point, we will. We have cash in the bank, we generated ₹1 crore in cash in the business last month and expect to generate cash in the September quarter. On a core operating basis, the cash we have is adequate for us.” The furniture market in India is worth about $18 billion, of which nearly 90 per cent is unbranded. (Source: The Hindu Business line)


Lenovo bags order from Tamil Nadu for 1.5 million laptops

It is meant for free distribution to students in the state Lenovo India has bagged an order from the Tamil Nadu government for providing over 1.5 million laptops to students in the state, according to a company official.

“We have won a large order from the Tamil Nadu government for supplying over 1.56 million laptops for free distribution to students in the state. This entire order is expected to be completed over the next few months,” Lenovo India Director (Commercial Named Account Business) Stephen Sequeira told PTI.

He, however, declined to comment on the financial details of the deal. Sequeira said state-owned ELCOT - the nodal agency for procuring electronic hardware and software for the state government and its schemes - finalised the tender where Lenovo outbid the other brands.

Launches ThinkShield cyber security solutions

Talking about the other initiatives, Sequeira said, the company has launched the second variant of its ThinkShield cyber security solutions. ThinkShield is Lenovo’s portfolio of secure ‘Think’ devices, software, processes, and services.

“ThinkShield goes beyond simple endpoint security, with solutions that create huge efficiencies, streamline IT administration, improve the end-user experience, and provide a platform for businesses to compete safely,” Sequeira explained.

The latest version gives IT admins more visibility into endpoints, offer self-healing capabilities and one-click fixes, provide easier and more secure authentication, and use intelligence to assess risk, he added. (Source: The Hindu Businessline)

Facebook cuts off Huawei to comply with US sanctions

Facebook said on Friday it would stop allowing pre-installation of its social networking apps on Huawei devices to comply with US sanctions against the Chinese technology giant.

The social media giant said it took the step after US President Donald Trump’s order barring Huawei from US technology exports over concerns that it works with Chinese intelligence.

“We are reviewing the Commerce Department’s final rule and the more recently issued temporary general license and taking steps to ensure compliance,” a Facebook spokesperson told AFP.

The California company said people with existing Huawei smartphones with Facebook apps will continue to be able to use and download app updates provided by Facebook.

The move by Facebook is the latest to isolate Huawei, which had become the world’s second largest smartphone vendor despite security concerns voiced in Washington.

Google last month said it would cut ties to Huawei, making it harder to obtain major apps from the US giant. The Google decision would leave Huawei without the Play Store, the marketplace for most Android apps, and other elements of the mobile operating system.

Facebook, which is banned in China but has more than two billion users worldwide, said its decision would affect its core social network as well as applications such as Instagram, Messenger and WhatsApp, which each have at least one billion users. (Source: The Hindu Businessline)

DoT extends suspension of official Ashish Joshi for another six months

The telecom department is learnt to have extended suspension of Uttarakhand-based officer Ashish Joshi - who had written to Delhi Police to take action against a rebel AAP MLA for posting an 'incendiary' video online.

The telecom department is learnt to have extended suspension of Uttarakhand-based officer Ashish Joshi - who had written to Delhi Police to take action against a rebel AAP MLA for posting an 'incendiary' video online. "DoT has extended suspension of Ashish Joshi, former controller of communication accounts, for a period of 180 days beyond initial 180 days of suspension. No reason has been explained in the order copy," an official source told.

The extension order was issued on May 16 - 10 days after he had written to telecom secretary Aruna Sundararajan seeking appointment.

The suspended official alleged that he is being targeted after he approached Sundararajan and former telecom minister Manoj Sinha on violation of transfer policyguidelines to favour some officers in his cadre and related Cabinet orders.

The Joshi's cadre is controlled by the Member (Finance) of Digital Communication Commission, formerly the Telecom Commission - apex decision making body at the Department of Telecom, the official source said.

E-mail sent to the department elicited no reply. Joshi did not respond to calls and sms in this regard.

Joshi was suspended on February 26 after he approached the police commissioner for action against rebel Aam Aadmi Party MLA Kapil Mishra for circulating a highly incendiary video, provoking people to attack "against traitors" on YouTube and Twitter in violation of the IT Act and Indian Penal Code.

Joshi on February 19 had also issued an order to telecom operators to crack down on offensive or obscene messages and set up a helpline to receive complaints against such customers.

The DoT has charged Joshi for misusing official letter head for filing a complaint against Mishra and also issuing orders to telecom operators on offensive messages with malafide intent without having any jurisdiction or making any advance preparation to address complaints that would come in response to the order.

"DoT has charged Joshi for misusing his personal twitter handle to threaten "general public" who were abusing him and his family after he was suspended," the source said.

Joshi was repatriated by the Delhi government to his parent cadre - telecom ministry, in May 2015, following a spar with political leadership. He had filed complaint with anti-corruption bureau in 2015 against then principal secretary of Delhi, Rajendra Kumar, based on which the Central Bureau of Investigation raided the Delhi secretariat in December 2015. (Source: ETTelecom)

White House seeks delay on Huawei ban for contractors

White House seeks delay on Huawei ban for contractors. The White House Office of Management and Budget has asked the U.S. Congress for more time to phase in a ban on federal contracts with companies that do business with Chinese telecom giant Huawei, part of a defense law passed last year.

The ban is one part of a multifaceted U.S. push against Huawei Technologies Co Ltd, the world's largest telecoms network gear maker, which Washington has accused of espionage and stealing intellectual property.

Huawei has repeatedly denied it is controlled by the Chinese government, military or intelligence services. It has filed a lawsuit against the U.S. government over the restrictions in the defense policy bill.

The defense law, called the National Defense Authorization Act (NDAA), placed a broad ban on the use of federal money to purchase products from Huawei, citing national security concerns.

It included a ban on direct federal purchases of Huawei equipment, which will take effect this year.

But the White House said the government needed two additional years to work out rules for another part of the law, which requires third-party suppliers and contractors to restrict their purchases and use of Huawei equipment.

"This is about ensuring that companies who do business with the U.S. government or receive federal grants and loans have time to extricate themselves from doing business with Huawei and other Chinese tech companies listed in the NDAA," Jacob Wood, a spokesman for the White House OMB, said in a statement.

Acting OMB Director Russ Vought asked congressional leaders and Vice President Mike Pence for the delay in a letter earlier this week. The letter was first reported by the Wall Street Journal.

Vought said the delay would "ensure the effective implementation of the prohibition without compromising desired security objectives," and said there would be a "dramatic reduction" in the number of contractors able to sell to the U.S. government without a delay.

Vought asked that restrictions against purchasing Huawei equipment imposed on government contractors begin in four years, rather than two years. The delay would allow "additional time to think through the associated potential impacts and possible solutions," he said.

The requested delay would not stop or affect the timing of a separate Commerce Department rule that added Huawei to its "Entity List," a blacklist that bans the company from buying parts and equipment from American firms without U.S. government approval.

President Donald Trump also signed an executive order last month that bars U.S. companies from using telecommunications equipment made by firms deemed to post a national security risk. (Source: ETTelecom)

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