Twitter recently acquired the Indian mobile services start-up ZipDial, and this led to celebration among the founders and employees. However, the celebrations and joy came to a sour end when the news of the lay off of almost 50% of the firm’s employees came to light.
Twitter has no roles for employees
On the very next day after the acquisition by Twitter in January, as many as 20 of the firm’s 50 employees got pink slips from the company, according to a report from the Times of India citing sources aware of the matter. The people asked to leave were employed in project management, engineering, user interface, testing and marketing. The reason cited by one of the employees was that the company no longer had suitable roles to offer to the employees.
The report noted the sacked employees received a month’s salary as severance, and will also be entitled to the full value of the stock options they held. Former ZipDial chairman Sanjay Swamy expects that the company laid off no more than ten employees in the testing, cloud telephony and marketing teams, says the report.
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“Twitter does not have a Quality Assurance or QA team. The engineers do their own testing. And some people on the cloud telephony side and sales side were taken off,” Swamy said. ZipDial’s former CEO Valerie Wagoner said “a majority of the ZipDial team” had joined Twitter.
Dark side of start-up acquisition
The acquisition will help Twitter to make its services available to the first-time users in emerging countries like Brazil, India and Indonesia. However, many experts believe that Twitter has acquired the start-up only for its core product and the user data of 60 million customers.
ZipDial, which is a four-year-old start-up, has risen to success by developing its business model around the ‘missed call,’ a unique Indian service. Prior to acquiring the start-up, Twitter worked with ZipDial on a few otheroccasions. When announcing the acquisition, Twitter said that it expected the acquisition to help it in making its services more affordable for the users primarily in emerging nations.
The lay-offs highlight a dark side of the start-up culture in India, where initially high-profile acquisitions grab headlines, but not much is said about what happens after these deals transpire.