BENGALURU/CHENNAI: SoftBank-backed e-commerce firm Snapdeal confirmed to Express on Wednesday that it was planning to trim its workforce. The company currently has around 8,000 people across verticals and it wants to cut down on employee costs which, according to some estimates, stand at around Rs 900 crore a year.
While Snapdeal did not divulge the number of employees it would lay off, sources say at least 600 people would lose their jobs. The firm said it was “rationalising part of the workforce” to become India’s first profitable e-commerce company.
According to reports, the firm has already begun downsizing, including in its digital payments and logistics arms FreeCharge and Vulcan Express.
In related incidents, Snapdeal co-founders Kunal Bahl and Rohit Bansal said on Wednesday they would take a 100 per cent pay cut while Freecharge CEO Govind Rajan resigned from his post. Last year, Bahl and Bansal’s total earnings from the company stood at about Rs 40 crore each, according to some estimates.
“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 goodbye to some of our colleagues in this process,” said Bahl in a letter to employees. He added that many other senior-level executives have also voluntarily offered reduction in their compensation.
The move to downsize comes in the wake of the company having made substantial investments for building its e-commerce infrastructure marketplace, payments and logistics platforms.
The company said it would further leverage these technology assets and realign its resources to become a leaner and more efficient business.
Snapdeal, which competes with Amazon and Flipkart, has already taken measures to increase its efficiency leading to an uptick in its operating profit.
Vulcan is expected to turn profitable by the middle of this year.
“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,” said a Snapdeal spokesperson.