AskMe suspends operations, lays off 4,000 employees
23 Aug 2016
Launched as a classified advertising site in 2010, Gurgaon-based AskMe.com has suspended operations and laid off 4,000 people after the sudden pullout of its principal investor, Astro Holdings, Indian media reported. The closing was one of the biggest shutdowns at a dot-com in India. Askme operates a clutch of portals, namely Askme.Com (classifieds and e-commerce), AskMeBazaar (e-commerce), AskMeGrocery, AskMePay, and Mebelkart (online furniture retail).
The last few months have seen a spate of layoffs by e-commerce companies such as Flipkart, Snapdeal and Ola.
Although AskMe formally suspended operations and laid of the employees last week, the site remained in operation today.
Hit by a severe cash crunch, AskMe’s majority investor Astro said it will appoint a forensic auditor to review the books of AskMe’s parent firm Getit. In an internal mail, Anand Sonbhadra, Group CFO at Getit Infoservices, directed senior staff to take certain steps to ensure prevention of “further liabilities” by suspending certain operations, given the company’s “current financial situation,” reported Business Standard.
Media reported most employees at the company did not receive their salaries for July while reimbursements for bills have not been cleared for the past many months. Business Standard reported that the layoff come also have been the result of a stand-off 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, Business Standard reported. AENL is going to appoint a forensic auditor to review Getit’s books and said it will take “appropriate steps” based on the results of the audit.
With total shareholding of 99 per cent, AENL has till date invested nearly $300 million. AskMe.com launched in 2010 as a classified site. In 2012, it launched AskMeBazaar, focused on small and medium enterprises. In 2013, AskMe was acquired by Getit, reported Economic Times.
The site had more than 12,000 listed merchants across 70 cities. It also entered hyperlocal services with a next-day delivery project, and financial technology with AskmeFin. In August 2015, the company invested $20 million in online furniture marketplace Mebelkart.