GoMechanic To Lay Off 70% Workforce, Says Made Grave Errors In Judgement

Car repair startup GoMechanic has announced it is laying off 70 per cent of its workforce as the company struggles to raise funds amid serious concerns of accounting troubles. In a LinkedIn post Wednesday, GoMechanic co-Founder Amit Bhasin said the Sequoia India-backed company made “grave errors in judgement” as it followed growth at all costs.

He said the leadership has decided to “restructure the business while we look for capital solutions”.

The Gurgaon-headquartered startup was founded in 2016 as a vehicle to bridge the gap between authorised service centres and local workshops. Of late, the company was struggling to raise funds despite discussions with several investors. Early last year, the startup was reportedly in talks to raise a round of funding led by Tiger Global at over $1 billion valuation.

However, Bhasin said, the intrinsic challenges of the sector “took the better of us and we made grave errors in judgment as we followed growth at all costs, particularly in regard to financial reporting, which we deeply regret”.

“We take full responsibility for this current situation and unanimously have decided to restructure the business while we look for capital solutions. This restructuring is going to be painful and we will unfortunately need to let go of approx. 70 per cent of the workforce. In addition, a third party firm will be conducting an audit of the business,” he added.

Bhasin further said the GoMechanic leadership “got carried away” in trying to explore every opportunity to grow.

Seeking the support of “our well-wishers”, he added that GoMechanic is working on a plan which would be most viable under the circumstances.