GoMechanic, a platform for car workshops and auto parts, will lay off about 70% of its staff. Co-founder Amit Bhasin made this announcement in a lengthy LinkedIn post. GoMechanic claims to have India's largest vehicle service facility network and offers everything from mechanics to carwashing services via an app. The firm is currently experiencing a liquidity shortage since its investment round is in peril, according to the sources.
In a LinkedIn post on Wednesday, Bhasin said, "We made grave errors in judgment as we followed growth at all costs, particularly in regard to financial reporting, which we deeply regret." He further went on to add, "We take full responsibility for this current situation and unanimously have decided to restructure the business while we look for capital solutions. This restructuring is going to be painful and we will, unfortunately, need to let go of approximately 70% of the workforce. In addition, a third-party firm will be conducting an audit of the business."
It should be mentioned that Kushal Karwa and Amit Bhasin were two of the four buddies who formed the Gurugram-based startup GoMechanic in 2016. While this was going on, Bloomberg reported that EY's research suggested that about 60 of the more than 1,000 GoMechanic service centres may have broken accounting rules to inflate revenue and divert funds, the people said, declining to be named because the conversation involved sensitive information. The investor group that hired EY pulled out of talks to invest in GoMechanic and informed Sequoia about the lapses, the people said.
