Snapdeal is laying off a large part of its workforce, as we wrote earlier today. FactorDaily has learned that the company has decided to pay three months’ salary (full pay) to the 600 employees it has let go.
According to two retrenched employees who we spoke to, the company has been downsizing for almost a year now and the biggest cut came yesterday, when regional offices were informed of the layoffs.
“All the business units have been asked to cut costs by 70%… along with February’s salary, they are offering us 3 months as severance,” one of the ex-employees, who is based in Bengaluru, said. Snapdeal employs over 4,000 people and it plans to cut nearly 30% of that workforce, according to another employee.
“We had seen it coming because it started in October-November last year. We knew something was going to come in March,” said the Bengaluru-based employee, who termed the 3-month salary-as-severance “justified.”
The company has had trouble raising fresh funds and business hasn’t grown as expected. Earlier today, Snapdeal co-founders Kunal Bahl and Rohit Bansal wrote to the employees that they were also going to take a 100% pay cut.
“Managers have been given a list of people to let go. Some others have been asked to take a pay cut… It’s going on now… chaos in the Delhi office,” said the employee cited earlier.
In the e-mail, the founders said: “Sadly, we will also be saying really painful goodbyes to some of our colleagues in this process. This is by far the hardest decision that we have ever taken in our lives. Our colleagues are our friends before they are co-workers, and I feel a deep sense of disappointment that we won’t be able to have them continue on this journey with us. We will do what we can to help them with their transition to their next opportunity.”
The email further said: “This will mean tough choices and a conscious departure from a me-too race to the edge of the cliff. Let’s remember — GMV is vanity, Profit is sanity.”
GMV, short for Gross Merchandise Value, is the total value of goods sold on a platform. It was was a metric most e-commerce companies, including Snapdeal, have talked about at length in the “mine is bigger than yours” publicity blitzkrieg they unleashed in the last 2-3 years.
Updated at 6.18 pm with minor grammatical corrections.