Google-backed tech unicorn VerSe Innovation to lay off 350 staff

India-based tech unicorn VerSe Innovation, the parent company of DailyHunt and Josh, plans to lay off around 350 employees this month.

The move is part of a structural alignment to boost investments in AI and streamline operations.

The company aims to automate manual processes to improve efficiency and is also exploring a potential public listing.

In FY24, VerSe reduced its EBITDA burn by 51%, from 1,448 crore rupee (US$169.19 million) in FY23 to 710 crore rupee (US$82.96 million).

It reported 1,261 crore rupee (US$147.34 million) in revenue, with projections of over 75% growth for FY25.

VerSe is backed by investors like Goldman Sachs, Sequoia Capital India, Google, and Microsoft.

🔗 Source: YourStory

🧠 Food for thought

1️⃣ Tech layoffs reflect a cyclical pattern of restructuring around emerging technologies

VerSe’s decision to lay off 350 employees while simultaneously investing in AI follows a well-established pattern in the tech industry.

This mirrors previous industry-wide transitions when companies like IBM, Intel, and Cisco collectively laid off tens of thousands of employees between 2016-2019 while pivoting toward cloud computing and software-based solutions 1.

Companies typically justify these restructurings as necessary for long-term survival, despite research showing that mass layoffs can increase voluntary turnover among remaining employees by up to 31% 2.

VerSe’s 51% reduction in EBITDA burn (from Rs 1,448 crore to Rs 710 crore) demonstrates the financial pressure driving these decisions, similar to how IBM and HP implemented strategic workforce reductions to optimize their cost structures during previous technology transitions.

AI transformation initiatives like VerSe’s typically focus on automating manual processes first, with more advanced AI capabilities following as the technology matures—a pattern consistent with successful AI implementations documented across industries 3.

2️⃣ AI investments promise major productivity gains but require significant organizational change

VerSe’s projection of 75% revenue growth in FY25 reflects the ambitious expectations companies place on AI transformation.