Snapdeal to sack 600 people, co-founders Kunal Bahl, Rohit Bansal say they made wrong decisions

With approximately 8000 employees, the co-founders of the company Kunal Bahl and Rohit Bansal have also announced that they will take a 100 per cent salary cut as more employees are expected to be laid off shortly.

Snapdeal to sack 600 people, co-founders Kunal Bahl, Rohit Bansal say they made wrong decisions

In a massive layoff exercise, Softbank-backed e-commerce marketplace Snapdeal on Wednesday started to downsize its employees.

According to reports, Snapdeal laid off over 600 people across Snapdeal, its logistics arm Vulcan and FreeCharge, the digital payments business.

With approximately 8000 employees, the co-founders of the company Kunal Bahl and Rohit Bansal have also announced that they will take a 100 per cent salary cut as more employees are expected to be laid off shortly.


The reports quoted the letter sent to employees by the co-founders saying, “Over the last 2-3 years, with all the capital coming into this market, our entire industry, including ourselves, started making mistakes. 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."

Since quite some time, the company is struggling to raise funds to compete with its rivals Amazon and Flipkart in Indian e-commerce market. Snapdeal reported a loss of R3,316 crore in FY16, on a revenue of R1,457 crore.

Key investors in Snapdeal include Softbank, Alibaba, eBay, Kalaari Capital and Ratan Tata.

Towards this goal, the company is saying goodbye to some of its employees. “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, and I feel a deep sense of disappointment that we won’t be able have them continue on this journey with us,” Bahl said.

This comes after Snapdeal took measures to enhance efficiency, which led to its EBITDA increasing by 40 per cent in the first nine months of the current financial year. The initiatives have led to 35 per cent lower delivery costs, 75 per cent lower data hosting costs on account of Snapdeal’s deployment of its private cloud solution, and 25 per cent lower fixed costs, Snapdeal said.

During the 9 month period, its net revenues rose by 3.5 times. Building on all these gains, the company expects to be the first profitable e-commerce company in India within two years, it said.

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