Snapdeal Along With Startups Started Cost Cutting


The business model of any venture is measured through only one yardstick and that is its profit and that is where Snapdeal falls down. There’s no doubt in that Snapdeal is one of the earliest and major e-commerce players. The co-founders of the Snapdeal, Kunal Behl, and Rohit Bansal, have sent an email to the employees of their firm that the company has to take some tough decisions in order to become a money-making venture. The founders of the Snapdeal admitted that they have made many mistakes and disclosed that the company will initiate a mass layoff to trim its size. They also added that the company needs to make many changes to keep stable with the transforming ways of the industry.

Mass Layoff and Salary cuts on the way now

The Mass Layoff and Salary cuts are the other shocking part of the email. “Both Rohit and I are taking a 100% salary cut,” said Kunal Behl. According to the news reports, the employees will be asked to leave and three-month severe pay will be offered to them. The exact numbers of employees to be cut back is yet to be revealed. The employees between 600 and 1,000 from its e-commerce operations and from Freecharge, its payment division, and Vulcan express, will be laid off. All the three branches of Snapdeal have an estimated staff of around 8,000. The layoffs will affect all levels of the employees in the company.

The founders of Snapdeal, Kunal Behl, and Rohit Bansal are very high profile Indian entrepreneurs to have decided to go without the salary altogether. Snapdeal was started seven years ago. According to Snapdeal, there are a number of employees in the company who have voluntarily agreed to cut the remuneration until the company comes out of this crisis.

From a Successful venture to the Unprofitable venture

A couple of years ago, Snapdeal was one of the greatest and successful entrepreneurial e-commerce company in the Country. In the last one year and a half, the major disappointments for the company started on the profitability figures in spite the revenue figures remained tall. According to the estimations, Snapdeal reported losses of Rs. 1,320 crore in 2014-15 and this figure crossed almost double to Rs. 3,000 crore in 2015-16. In the email to the employees, Kunal Behl was reported saying to the employees, “In the last 2-3 years, with all the capital spending into the market, the company and entire industry started taking bad decisions and making mistakes. We were growing our business much before the right economic model and the market fit was figured out.” The main competitors of Snapdeal like Amazon and Flipkart also impacted the company badly. The Indian Market is largely set apart by the constant battles of good deals and discounts. We just hope that Snapdeal comes into the market with some great strategies and plans to become reach again at the profitable numbers in the world of the e-commerce industry.

Snapdeal may delegate Freecharge

The time for Snapdeal is definitely not going too great. According to some reports, the founders of Snapdeal are in the process of holding talks with a South African group, Naspers, to sell Freecharge for about US$300 million. Snapdeal had got hold of online recharge platform Freecharge for an estimated amount of US$400 million in April 2015.

In the coming days, things will get clearer about the next steps by the founders of the Snapdeal to make the company again a successful venture. As of now, it is clear that Mass layoffs and salary cuts are on the cards. The future of Freecharge is still at the stake. We just wish the Founders the Snapdeal a best of luck for their new future plans and strategies.


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.