A Delhi-based tech startup has reportedly faced a ₹2 crore loss due to a critical testing error by a single employee, according to a post shared on Reddit by a software engineer. The error allegedly ruined a major order for a multinational corporation, creating a significant financial burden for the company. Management has responded by proposing a cost-sharing split across the entire team to cover the substantial loss.
The company is seeking written consent from employees for a 20-30% pay cut for the next two months, with appraisals also put on hold. As reported by the Reddit post, management is offering either Employee Stock Ownership Plans (ESOPs) or a promise to repay the deducted amount later in exchange for the salary reduction. The affected employee, who has spent several years at the startup and leads a team of more than 20 developers, claims they have sufficient savings to withstand the temporary reduction in income without facing financial hardship.
According to the latest reports, the company is currently unfunded but management claims they will issue ESOPs once they secure a funding round. The startup's current valuation is around ₹90 to ₹100 crores, and they are aiming to raise that funding in 2027. As per the CTO's statement, the company is planning to use the ESOPs as a key incentive to attract investors and grow the business.
Reddit users provided overwhelming criticism of the company's approach, with one comment stating, 'This literally should come out of the founders and upper management paycheck not the regular employees. If you have substantial stock options with the company then it's understandable, but if no, then they're fleecing you for a issue out of your control.' Another warned against permitting the cost-sharing approach, stating it would become company culture if allowed. A widely upvoted response argued the loss should come from founders and upper management, stating that if not, they were being fleeced for an issue outside their control.
Several Reddit users advised the employee to prepare for an immediate exit, with one commenter writing, 'Depending on your financial stability, get an exit out immediately. There is no way you can plan a long term future in here. Get an offer and dont give anything in writing.' Another shared personal experience, stating, 'Don't do it. Can't trust founders. I had ESOPs given in lieu of salary cut during covid. Then company sold my branch and I got nothing in the acquisition and had to give up my esops.' The post has attracted significant attention online, with users questioning the startup's future prospects and warning against setting a precedent for similar cost-sharing approaches.
