Source | BusinessToday
Snapdeal co-founders Kunal Bahl and Rohit Bansal have taken a 100 per cent salary cut, while many others at the firm have “proactively” offered significant reduction in compensation.
The SoftBank-backed firm, which has been struggling to raise fresh funding, is also laying off hundreds employees and eliminating non-core projects to focus on “profitable growth”.
In an e-mail to employees, Bahl conceded that over the last 2-3 years, with all the capital coming into this market, the company and the entire industry “started making mistakes”.
“We started growing our business much before the right economic model and market fit was figured out. We also started diversifying and starting new projects while we still hadn’t perfected the first or made it profitable. We started building our team and capabilities for a much larger size of business than what was required with the present scale,” he said.
Bahl cited examples of global companies like Apple, Tesla, Amazon, Netflix, Lego and SpiceJet that “painted themselves into a corner many times over” before they became successful. He said Snapdeal is being re-organised into a lean, focused and entrepreneurial company.
“We are combining teams, reducing layers, eliminating non-core projects and strengthening the focus on profitable growth. Sadly, we will also be saying really painful goodbyes to some of our colleagues in this process,” he said.
According to sources, the company is in the process of laying off about 600 people across Snapdeal, Vulcan Express (logistics) and FreeCharge (payments). “…both Rohit and I are taking a 100 per cent salary cut. Many of our leaders have also stepped up proactively and offered to take a significant cut in their compensation,” he said.
The company had last reported an employee strength of 8,000 people. Snapdeal is locked in an intense battle with rivals Amazon and Flipkart.