Surgery care startup Pristyn Care laid off nearly 300 employees out of its 2000-odd workforce last month as part of a broader cost-cutting initiative amid uncertain economic conditions. Nearly 15% of the workforce comprising junior and mid-level employees working in sales, administration, category, and city teams were affected in the exercise.
The Sequoia Capital and Tiger Global-backed healthtech firm cited under-performance to justify the practice, according to two former employees. “I walked into the office one morning and was summoned by the HR manager to surrender my laptop. I was told that targets were not being met and employees showing poor performance were being dismissed,” said one of the two employees.
YourStory has reached out to Pristyn Care for comments. This story will be updated with its response.
Pristyn Care joins several healthcare companies eliminating roles to cut costs. Kalaari-backed Phable laid off 70% of its workforce last month, while Stride Ventures-backed Medibuddy let go of 8% of its employees in January.
While the healthtech firm logged a healthy revenue in the last fiscal and is ambitious about its future plans, its burn rate remains high. Employee benefit expenses is the biggest cost centre, prompting the firm to cut down on workforce to contain the cash burn.
Founder and CEO of Pristyn Care Harsimarbir Singh said that the company has been “mindful” while hiring its 2000 employees and does not need to lay off employees, according to a Financial Express report from last month, an irony considering employees were laid off just days after the report was published.
Moreover, Singh wrote a LinkedIn post last week calling out the industry-wide practice of layoffs. “Many companies have gone from work-from-anywhere to come back to office or lose the job. It’s the same as hiring 10x and then cutting jobs 100X. As new age companies we need to innovate but not discard the past. Hire responsibly,” the post read, causing agitation among employees who are questioning the hypocrisy.
The Gurugram-based company shut down operations in its international expansion segment focused on medical tourism, according to two people in the know.
Launched in June last year, the vertical aimed to popularise the influx of international patients to India for healthcare. The company initially focused on Uzbekistan, Turkmenistan and some eastern European countries with the aim of eventually expanding the service to Middle Eastern and Asian countries.
According to the two people quoted above, the vertical failed to generate sufficient revenue and contributed negligibly to the overall business. Out of the 10 employees in the vertical, a few were absorbed into other verticals while the others were laid off.
“Medical tourism is very new to India and the infrastructure must develop further to support a business,” said an industry executive asking not to be named.
A culture problem
Pristyn Care, a market leader in the surgery care space, is well-funded after raising about $181 million from eminent investors such as Sequoia Capital, Tiger Global Management, Hummingbird Ventures, and Trifecta Capital. Founded in 2018 by Harsimarbir Singh and Vaibhav Kapoor, the company’s quick turnaround was helped by the pandemic when healthcare assumed importance.
The company lauds itself over its asset-light business model. It has tie-ups with over 800 hospitals in the country that provide vacant operation theatres for conducting surgeries. Pristyn Care provides surgery equipment and medical expertise to patients for elective surgeries like proctology and gynaecomastia.
It registered a 270% growth in its operating revenue to Rs 96 crore in FY21, while expenses more than doubled to Rs 164 crore in FY21 from Rs 61.60 crore in FY20, according to filings with the Ministry of Corporate Affairs. Employee benefit expense was the biggest cost centre at Rs 52.9 crore in FY21.
The company aims to clock a revenue of Rs 1,000 crore by FY24 as it looks to keep its foot on the accelerator while aiming to minimise its cash burn rate, Financial Express reported last month just days before the layoffs took place.
However, it seems like the company grew too much too quickly.
The recent layoffs highlight a larger turmoil within the company, especially with employee attrition rising dramatically over the past year, according to two former employees and two industry executives. According to them, unrealistic targets and lack of communication are among the biggest problems within the firm.
“Within a month of joining, I was asked to bring on board 20 patients within a month. That’s impossible,” said one of the two former employees who resigned in December after a year-long stint.
”Getting in touch with my manager was always difficult. My colleagues knew I was struggling. How can the management state performance issues when it had been only a few months since I joined?” said another employee who was let go in February.
A few months ago, CEO Harsimarbir Singh was widely criticised on social media after his LinkedIn post encouraging offbeat interview hacks went viral. He said that the company rings the candidate at 8.00 am to request an interview to find out if they are early risers, schedules telephonic interviews at 11.00 pm to check if they are late workers, and gets them to spend 6-8 hours in the office to test their culture and patience.
“This is a classic example of a toxic work environment,” said one Twitter user reacting to the post. “First thing to do is avoid the job if someone schedules a call outside working hours,” said another tweet.
“For a company backed by esteemed investors with so much money in the bank, it is irresponsible to make tall claims of great culture and assume a high moral ground,” said the other former employee.
