Bengaluru-based startup Rupeek, which offers gold loans, has said it has decided to not renew contracts with third-party HR contractors due to the current situation form the COVID-19 crisis.
On Friday, Karnataka MLA Sowmya Reddy tweeted that the company has terminated the employment of 600 people, and also tagged the state government, the central labour ministry and the PMO on the matter.
The company had hired contract employees for divisions such as customer experience and sales.
"We would like to clarify that in the current business and economic environment, we had to take the unfortunate decision of not renewing our contract with our human resource contractors & the consequent reduction in the number of outsourced staff. We regret the unfortunate timing of this event. To protect their interests, we are offering a generous severance package over and above contractual dues," the company said in a statement.
"We have also decided to put in limbo any decision on the rationalization of our own employees. We will review this at an appropriate time. Rupeek remains committed to ensuring the best interests of all its employees, customers and stakeholders and will continue to work towards long term business sustainability."
CNBC-TV18 on Friday reported that the Labour Ministry is collecting data on layoffs and salary cuts across companies to ensure that unemployment does not increase due to the lockdown.
Rupeek counts Accel, Sequoia Capital, and Bertelsmann India as investors.
First Published: IST