Startup shock: Employee quits in a week, after scamming shoes worth Rs 2 lakh from sneaker brand

A business controversy involving Gully Labs has stirred debate online after its co-founder Arjun Singh revealed how a former staff member allegedly exploited internal systems to cause financial losses.

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Sneaker Startup Faces Internal Betrayal

The Delhi-based footwear label recently discovered that a newly hired computer science professional had misused backend access to generate full-discount promo codes. According to Singh, the recruit began creating 100 percent-off coupons within days of joining the company. These codes were reportedly used to place multiple sneaker orders for acquaintances, resulting in a loss of nearly ₹2 lakh.

Shockingly, the employee resigned within a week of being appointed, leaving the startup scrambling to assess the damage.

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Partial Recovery Turns Into Legal Tension

After the misconduct came to light, the company confronted the individual. Initially, he appeared willing to cooperate and returned a portion of the sneakers that had been dispatched. However, only about half of the merchandise was recovered, as several pairs had already been worn or distributed.

The situation escalated further when the former employee allegedly began issuing legal warnings to the company, accusing them of harassment in response to their demand for reimbursement or product return. What began as an internal breach of trust quickly transformed into a legal standoff.

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Stronger Safeguards Introduced

Following the episode, Gully Labs tightened its operational security. The founders reportedly strengthened internal controls to prevent similar incidents in the future, especially concerning discount systems and order management access.

Singh’s revelation surfaced as a response to entrepreneur Akshay Jain, who had posted about the hidden complications that arise as businesses expand. Jain mentioned that scaling a company often demands stricter monitoring of customer databases and order exports—even from within the organization—due to rising security concerns.

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Social Media Reacts

The discussion quickly gained traction on X, formerly known as Twitter, sparking debate about workplace ethics and internal fraud. Some users remarked that such incidents reflect deeper trust issues in professional ecosystems. Others recalled how employee discount misuse allegedly contributed to the downfall of fashion e-commerce platform Jabong, claiming that internal discount codes were widely resold, inflicting heavy losses.

The episode has since fueled broader conversations around accountability, startup vulnerability, and the delicate balance between trust and security in growing companies.