Indian E-commerce giant Snapdeal is looking to tighten up its purses. Snapdeal is looking to cut its employees strength to do it. With growth and funding moving at a slow pace employee cut is a necessity for Snapdeal. The latest cut down could see 1,000 employees losing their jobs.
Jasper Infotech, owns FreeCharge and Vulcan Express in addition to Snapdeal. Vulcan Express is Snapdeal’s logistic arm. Vulcan Express is expected to trim down the most. The logistcs arms contract workers are going to be reduced. Over the next two months the reduction will take place.
The decision to further reduce its workforce also comes on the back of the company’s decision to shut down Shopo, the Etsy-like online consumer-to-consumer platform for small sellers that it relaunched in 2015, and in which chief executive Kunal Bahl had said the company would invest $100 million.
Snapdeal’s employee related expenses rose to a whopping 148% from the last fiscal year. Employee expense is Snapdeal’s third largest expense behind marketing and advertising. Also, the company recorded losses to the tune of 2,096 crore rupees. Therefore cut down is important for the comapny to survive.
For the Snapdeal employee cut down, Operations managers across the country have been sent e-mails to “right size” their respective teams.
The cut down is aimed at mid-level and lower level employees but a lot of top corporate bosses have resigned from Snapdeal including Senior Vice President Tony Navin,senior vice-president and head of the consumer-to-consumer platform Shopo Sandeep Komaravelly and Abhishek Kumar, head of corporate development over the past few weeks.
Jasper Infotech on the other hand is struggling to raise capital. Its attempts to raise capital independently for FreeCharge haven’t yielded any results. The Capital Crunch may have been one of the top reasons behind the employee cut down. Furthermore, with the crunch expect less sales and smaller discounts.
Snapdeal CEO in an interview told Reuters that he is expects Snapdeal to turn profitable in next two years. He Added “I see a relatively clear line of sight to (profit) and we’ve been making great progress in that direction also,”. “We needed capital to build the infrastructure which we have, now we have to take control of our destiny.”
As long as Snapdeal struggles to raise cash expect cut down in workforce and other areas as well.