#Asia India’s Snapdeal lays off employees; Co-founders admit to making mistakes

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Earlier there were reports that Snapdeal was planning to let go of 3,00 staff workers over the next few months

Indian e-commerce major Snapdeal plans to lay off nearly 600-1,500 employees across various divisions, including its logistics unit Vulcan and payments unit Freecharge over the next few days, as per various media reports.

According to a person with direct knowledge of the matter, the Delhi-based firm has already undertaken the lay-off. He, however, declined to share more details.

Earlier, there were reports that Snapdeal was planning to let go of 3,00 staff workers over the next few months. The company has reportedly a total staff strength of 8,000 people.

A year ago, Snapdeal had fired around 200 people across various departments.

Also Read: India’s Craftsvilla lays off around 100 employees

In an email to employees on Wednesday, Co-founders Kunal Bahl and Rohit Bansal, 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.”

The duo has also admitted that they had made mistakes. “Over the last 2-3 years, with all the capital coming into the 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,” said the email.

The Co-founders have also said they are taking a 100 per cent salary cut. “We believe that every resource of the company should be deployed for driving us towards profitable growth and with this announcement, both Rohit and I are taking a 100 percent salary cut. Many of our leaders have also stepped up proactively and offered to take a significant cut in their compensation, which is an excellent sign of how galvanised the team feels in this shared quest for profitability.”

Also Read: Alibaba investing up to US$250M in Indian m-commerce firm Paytm: Report

Bahl said that global companies like Apple Tesla, Amazon, Netflix and Lego have gone through similar situations before they became successful. “That said, there is almost no successful company on the planet, which hasn’t gone through this phase in their lifetime – Apple, Amazon, Netflix, Tesla, Lego, Spicejet, you name it! Each one of them had painted themselves into a corner many times over before they became as wildly successful as they are today. A quick look at their stock prices over the last 15 years will show you what we’re talking about. The formula to revive the company is uncannily similar for almost all of them – focus on only your core, stop all non-core activities, reduce costs drastically, turn profitable as soon as you can, and use those profits to spur further growth and new projects. We must do the same, and there is no doubt that with the really smart folks we have in the company, we will make it something that we are all very proud of.

Recently, Economic Times reported that Paytm and Snapdeal, two behemoths in the online retail segment, had merger talks in January this year. The talks were triggered by Chinese e-commerce giant Alibaba, which has considerable stake in both companies.

The post India’s Snapdeal lays off employees; Co-founders admit to making mistakes appeared first on e27.

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