Milkbasket’s Layoffs: Impact on India’s Grocery Delivery Industry


Milkbasket, a Gurugram-based grocery delivery startup, is the latest victim of the pandemic-induced economic slowdown. The company was forced to lay off 400 employees, which accounts for nearly 67% of its workforce. This news has sent shockwaves across the industry. Milkbasket, which started as a milk delivery service, had raised $39 million in funding and was acquired by a larger player in the market. In this blog post, we will explore the reasons behind Milkbasket’s layoffs, the impact it has had on the organization, and what it means for the industry as a whole.

Company History and Funding

Milkbasket was founded in 2015 by a group of entrepreneurs with a vision to revolutionize the grocery delivery industry. The company began by delivering milk to customers in Gurugram and later expanded to include other grocery items. Milkbasket’s business model was built around a subscription-based delivery system that promised to deliver fresh groceries to customer doorsteps before 7 am every day. Since its inception, Milkbasket has received substantial funding from leading venture capitalists, including Mayfield Fund, Beenext, Unilever Ventures, and Blume Ventures. The company raised $26 million in Series B funding in 2019 and further secured $13 million in January 2020.

Milkbasket’s Performance:

Milkbasket had made significant progress in the Indian market. The company had a presence in six cities and delivered over 130,000 orders daily. Milkbasket had also reported a 70% increase in revenue from 2018 to 2019 and an 80% increase in customer retention in the same period. These were impressive figures, indicating that the company was well on its way to scaling further.

Reason for Layoffs:

Despite Milkbasket’s impressive performance, the pandemic hit the company hard. The lockdown enforced to curb the spread of Coronavirus resulted in logistics and supply chain challenges. Moreover, with many people staying at home, the demand for milk and other grocery items dropped substantially. The company was forced to relook at its business model, which relied heavily on daily deliveries. The company issued a statement outlining the reasons behind the layoff. An excerpt from the statement reads, “We had to make a tough call to lay off 400 people as we had to restructure the organization to achieve the desired unit economics and long-term growth goals. We are saddened that we had to lose valuable colleagues who contributed to the growth of the company in the past. Our commitment to providing fresh and quality products to our customers remains unwavering.”

Impact of Layoffs:

The layoffs had a severe impact on Milkbasket’s employees, who were left jobless in the midst of a pandemic. Many took to social media to express their disappointment and anger over the layoffs. However, Milkbasket assured its customers that the layoffs would not affect their operations, and they would continue to deliver fresh and quality products to their customers. The layoffs have also raised concerns regarding the viability of the grocery delivery industry in India. With many players in the market, competition is high, and margins are thin. The pandemic has only made things worse. The industry is facing significant challenges with logistics, supply chain, and customer demand. The closure or downsizing of companies like Milkbasket raises valid concerns about the future of the sector.


In conclusion, Milkbasket’s layoffs highlight the harsh reality of the pandemic-induced economic slowdown. The company had performed well in the past, but the pandemic forced them to make tough decisions. While the industry still has significant growth potential, it is clear that players will need to relook at their business models and come up with innovative solutions to overcome the challenges posed by the pandemic. The layoffs have been a setback, but they might be an opportunity for the industry to emerge stronger.

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