Soon after calling off the merger deal with Flipkart, Snapdeal has now made its next strategy to go through a massive resizing. The struggling online marketplace now wants to run a leaner, meaner version of the organization, and will lay off close to 80 percent of its workforce, ANI reports.
A top official told the news agency that department heads were instructed to prepare a list of people who would be asked to leave. At present, Snapdeal has about 1,200 employees. If the Gurgaon-based firm goes through with its decision, it would be left with about 200 employees only.
This would be Snapdeal’s second major layoff exercise. Last year in July, it had slashed its workforce from over 9,000 to under 2,000 [Read Here]. It was one of the biggest layoffs in the India’s startup space. And earlier this year, it fired 600 more employees in a bid to cut costs; the founders as well as some top executives had to forego their salaries. “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 percent salary cut,” Snapdeal founder & CEO, Kunal Bahl, wrote in an email to employees.
According to a senior executive who remain wants to be anonymous, the company has plan to retain around 300 odd employees in the company.
Snapdeal is technically the first Unicorpse Startup of India as the troubled start saw its valuation falling down from $6.5 billion to less than $1 billion in a year or so.
Snapdeal now has cash reserves of Rs 385 crore ($60 million) from Axis Bank to which it sold its payments unit, FreeCharge. It further looks to gain about Rs 100-120 crore from the sale of its logistics unit, Vulcan Express. There are no buyers yet. And given Snapdeal’s knack of dilly-dallying, that could take long as well.
Notably, the amount of mistakes founders of Snapdeal had made can possibly make them the ‘Yahoo’ of India as by rejecting the $900 million merger offer from Flipkart can cost them a more setback in terms of valuation in future.