Exploring ways to optimise costs and rewrite its success story, Online marketplace Snapdeal has confirmed that it is undertaking layoffs within the company. Snapdeal co-founders Kunal Bahl and Rohit Bansal in an email to employees on Wednesday said they have had to take tough decisions to retain the company’s profitability, which include – employee layoffs, 100 per cent salary cut for themselves, among others.
Quoting Zig Ziglar, Kunal said, “When obstacles arise, you change your direction to reach your goal, you do not change your decision to get there.”
According to The Economics Times, here are key highlights of Kunal Bahl’s email to Snapdeal employees:
* Snapdeal probably holds the record for the company that got written off the most number of times by Internet pundits.
* Have our company and industry been going through a troubled time? Absolutely. Did we make errors in our execution? No doubt about that
* We started doing too many things, and all of us starting with myself and Rohit, are to blame for it.
* 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!
* 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.
* As part of our overall path to profitability plan that is currently in full swing, we will be reorganising 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
* 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.
* Sadly, we will also be saying really painful goodbyes to some of our colleagues in this process
Snapdeal has also put on sale FreeCharge and is in talks with Naspers, the South Africa-based internet group, to sell it for $300 million (Snapdeal had acquired FreeCharge in 2015 for $400 million).
Mohandas Pai on Snapdeal’s move
After Snapdeal confirmed the layoff, T V Mohandas Pai, the former Chief Financial Officer of Infosys, said the development was symbolic of unprofitable model adopted by some startups. According to Money Control, Pai said Snapdeal’s plight has not come as a surprise.
“They clearly had no strategy and were egged on by people who wrote large cheques and told them to spend it in the hope they would get more money. And it all blew up.”
Snapdeal will make profits in 2 years
Earlier this month, Kunal Bahl said that the online marketplace provider did not immediately need to raise capital unless it makes an acquisition. Snapdeal expects to turn profitable in the next two years, its CEO said, as the company cuts costs and boosts efficiency in a market currently dominated by homegrown Flipkart and US Internet giant Amazon.