According to media reports, GoMechanic, a car repair startup, has laid off around 70 per cent of its workforce. The company has been struggling with funding in the midst of the funding crunch.

Amit Bhasin, co-founder of GoMechanic, said in a LinkedIn post that the company had made "grave errors in judgement" as it pursued growth at all costs. The Gurgaon-based startup was incepted to bridge the gap between authorised service centres and local workshops. Earlier last year, the company was in talks with Tiger Global to raise funds at a valuation of USD 1 billion.

GoMechanic co-founder Amit Bhasin has admitted to errors in financial reporting after irregularities were found in the company’s account books.

The car repair startup was in talks to raise US$75-80 million in a funding round led by SoftBank, but the deal was called off due to financial irregularities.

Bhasin added that, "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 percent of the workforce. In addition, a third-party firm will be conducting an audit of the business.

Several tech or SaaS-based companies have been firing a significant number of their workforce, including Rebel Foods, Exotel, and Dunzo. According to experts, startups across verticals are laying off because they either have very little cash reserve left to survive the funding winter or because they have been allocating more capital to different verticals and cutting costs through headcount reduction.