Source | The Times Of India : By Digbijay Mishra & Shubhra Pant
BENGALURU/GURGAON: As online marketplace Snapdeal started laying off employees on Wednesday, the company’s co-founders Kunal Bahl and Rohit Bansal sent out an email to anxious staff, admitting they took several wrong decisions over the past two-three years amid a funding frenzy and that it was time to course-correct. The communication from the founders follows a cost-cutting drive by Snapdeal to conserve cash. The co-founders will take a 100% salary cut, Bahl said in the email, which was reviewed by TOI.
The co-founders had written another email+ around 10 days ago, as reported by TOI in its February 13 edition, preparing employees for the impending “tough decision”.
Employees said the troubled e-tailer, which is backed by SoftBank of Japan and Foxconn of Taiwan, has laid off 250-300 people across the country in the first phase, a bulk of them at its headquarters in Gurgaon. The final number of layoffs could run up to 1,000 or more, said people close to the development.
A Snapdeal spokesperson claimed the retrenchment number would be much lower – around 600, over the next few months.
TOI had reported on February 17 that the online retailer was looking to merge some of its major categories. The company’s salaries and bonuses in 2015-16 amounted to Rs 673 crore, an increase of two-and-a-half times over the previous year’s Rs 217 crore.
“We started growing the business before the right economic model and market fit was figured out,” Bahl and Bansal wrote in their email. “A large amount of capital with ambition can be a potent mix that drives a company to defocus from its core. We feel that happened to us. We started doing too many things, and all of us starting with myself and Rohit, are to blame for it,” they said. They said from here on, Snapdeal would focus only on its core strengths and shut all non-core businesses in a bid to drastically cut cost.
Amid tight security arrangements, Snapdeal employees at headquarters were asked to leave immediately, some of them told TOI. There are also unconfirmed reports of the company moving to a smaller office in Gurgaon.