Operations managers across the country have been sent e-mails to “right size” their respective teams.
In its struggle to cut down losses and raise more funds to stay afloat, Snapdeal is looking at cutting its third largest cost—employee cost—by rightsizing its workforce. Reports say, the latest cut down at Snapdeal could see 1000 employees losing their jobs. Apparently, operations managers across the country have been sent e-mails to “right size” their respective teams.
The cut down looks like an important move for the company at a time when the last recorded loss was about 2,096 crore rupees. Employee expense being Snapdeal’s third largest expense after marketing and advertising, rose to a whopping 148 per cent from the last fiscal year.
Jasper Infotech owns FreeCharge and Vulcan Express in addition to Snapdeal. Vulcan Express, which is Snapdeal’s logistics arm, is expected to trim down the most as its contract workers may be reduced over the next two months.
Besides, the decision to reduce its workforce also comes on the back of the company’s decision to shut down Shopo, the 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.
Although the cut down is mostly aimed at mid-level and lower-level employees, a lot of top corporate bosses have already resigned from Snapdeal over the past few weeks including senior vice president Tony Navin, senior vice-president and head of Shopo, Sandeep Komaravelly, and Abhishek Kumar, head of corporate development.
Jasper Infotech, on the other hand, is struggling to raise capital, and this finance crunch seems to be one of the top reasons behind the employee cut down. Furthermore, the crunch is expected to result in less sales and smaller discounts. As long as Snapdeal struggles to raise funds, one can expect a cut down in the workforce and other areas as well.