Struggling with falling revenue, Snapdeal has announced that there are likely to be large scale lay-offs in the company. The founders Kunal Bahl and Rohit Bansal have made their intentions clear by taking a 100% pay cut. The founders also acknowledged that there were some errors in strategy, which led to the company’s diminishing fortunes. The lay-offs are an attempt to make the company turn profitable again. Although Snapdeal did not reveal the exact number of employees that would be asked to leave, sources said that it can be anywhere between 50-60% of the workforce.
In an email sent to employees, Snapdeal stated that the industry was going through a turbulent period and there were some errors in execution. “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,” the email read.
“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 galvanized the team feels in this shared quest for profitability. As part of our overall path to profitability plan that is currently in full swing, we will be reorganizing the company into a lean, focused, and entrepreneurial one. 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. This is by far the hardest decision that we have ever taken in our lives,” the email stated.