Snapdeal founders Kunal Bahl and Rohit Bansal told their employees that they would take a 100% salary cut and let go of several employees in an attempt to increase profits, in a letter obtained by TechinAsia on Wednesday. Besides this, media reports have quoted unidentified officials who said around 600 employees will be sacked across Snapdeal, Vulcan (logistics) and Freecharge (digital payments business) as part of the drive.
“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. Our colleagues are our friends before they are co-workers,” the letter from the e-commerce portal’s founders said.
Attributing the development to a result of errors in execution, the founders said they were confident of welcoming back some of the employees who “will be leaving us at this point”. The letter said that several management-level officials had also offered to undergo a cut in their compensation package.
“The formula to revive the company is... 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,” the letter said.
The company had last reported a staff strength of 8,000 people. It had incorporated measures to reduce the cost of operations that resulted in 35% lower delivery costs and 25% lower company fixed costs, The Hindu reported.