Snapdeal to layoff over 600 employees , Founders pledged not to take salary .
In a bid to turn fortunes after a dismal year, Indian e-commerce company Snapdeal has confirmed rumours of several layoffs within the organization. In an email to employees, the company’s founders Kunal Bahl and Rohit Bansal have pledged not to take salary for an unspecified period. Other top company executives are also expected to take a pay cut as well. “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% 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” , the email stated.
In an earlier interview with Reuters, Snapdeal’s Chief Executive Bahl had said he expected the company to turn profitable in the next two years. Snapdeal’s employee-related expenses rose to Rs 911 crore in FY 2016, up 148% from the previous fiscal. Employee expenses is the largest cost for the company, after marketing and advertising. But unlike the latter, which is a variable cost, wages is a fixed cost. For the financial year 2015-16, the company’s total sales grew 56% to Rs 1,457 crore, but losses more than doubled to Rs 2,960 crore.
The exact number of employees that are affected by the decision is yet to be disclosed but reports claim that at least 600 have been cut off from the workforce. “Daunting as it may appear in the moment, it is important that we do this now, so that we can continue on our overall mission of building a successful, profitable business that provides incredible opportunities to our customers, sellers and partners. This also means more responsibility for the team members continuing on this journey with us.”