Startups cut back on realty to slash costs
BENGALURU: Given continued uncertainties in business and employees working from home, startups are giving up office space, including rented buildings and seats in co-working centres, to reduce costs. Besides, many offices are unwilling to bring back workers as fear of infections remains high.
In recent months, companies such as Uber Technologies Inc., Swiggy, Policybazaar, Instamojo, Ezetap, Mobikwik and upgrad have vacated or reduced office space across metros.
With the fall in lending and other businesses, Softbankbacked insurance unicorn Policybazaar has given up four of its 12 leased office buildings in Gurugram.
Payments startup Mobikwik does not plan to give up its Gurugram headquarters, but is re-negotiating rental agreements and may look at co-working options for its satellite offices. “We have also considered reducing our real estate footprint and have not opened our offices since the first lockdown. We expect to operate from home for the next few months, and have let go of two of our seven rented satellite offices,” said Upasana Taku, co-founder. Despite the gradual nationwide easing of restrictions beginning 1 June, many states and cities have reimposed curbs on business and mobility, as coronavirus infections rise. The fresh curbs have also slowed plans of companies and workers to reopen offices. A Swiggy spokesperson said the pandemic has altered its utilisation of real estate. “…It forms a significant part of our ongoing fixed costs and hence, we have optimized our network of kitchens and rationalized office space across cities. We have scaled down our cloud kitchens temporarily or permanently depending on profitability profile, and carefully reduced real estate usage by consolidating many of our smaller offices,” the spokesperson said. So far, Swiggy has closed offices in Tier 3 and 4 cities, including Gorakhpur and Anantapur, and aims to reduce real estate space further.
Mihir Dalal and Salman SH contributed to this story.