Online e-commerce marketplace Snapdeal has confirmed plans of layoff soon without divulging the number of employees to be affected by the decision. The company looks at restructuring after a dismal 15 months. The company founders, Kunal Bahl and Rohit Bansal have pledged to not take salary for an unspecific period of time, until the company recovers.
According to an official release statement, “On our journey towards becoming India’s first profitable e-commerce company in two years, it is important that we continue to drive efficiency across all parts of our business, which enables us to pass on the value to our consumers and sellers. We have realigned our resources and teams to further these goals and drive high-quality business growth. 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,” Economic Times reports.
Many more company executives are expected to take a pay cut as well. The email stated, “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.”
Being loud about plans to turn the company profitable in the next two years, as said by Snapdeal Chief Executive Bahl to Reuters earlier, the Gurgaon-based e-commerce company was hard hit by huge losses, ongoing churn of its top leadership within the company and rapid growth of its rival Amazon in the same marketplace.
As a part of the revamping strategy, the founder stated in the email plans, to reorganise the company into a lean, focused and entrepreneurial one by combining teams, reducing layers of hierarchy, eliminating non-core projects and thus strengthening the focus on profitable growth.
Admitting mistakes made by the company during the last 2-3 years as the industry evolves, the founders said in the email, “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.”
“Ambition is critical, because that’s what motivates us to give our very best every single day – to achieve the undoable. However, 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.”
On a concluding note in the email it said, “For now, we need to keep our heads down, focus all our energy on execution that delivers on our two focus areas – best customer and seller experience, and profitable growth. This will mean tough choices and a conscious departure from a me-too race to the edge of the cliff.”