Snapdeal a fashion and lifestyle e-commerce portal has planned to terminate its 30% workforce in 2 months. The company lacks high investment and the growth is determined to be running at a slow pace.
It is expected to affect 1,000 employees directly recruited in the workplace whereas others on contractual basis hired in logistic division will also face the same influence.
“5,000 odd contract staff employed by the company’s logistics subsidiary Vulcan Express will be pared down as well as about 3,000 people on the rolls of the logistics company” said a company executive and two consultants working with the company.
SoftBank which backs Snapdeal has been on a cost cutting drives as it has been facing a serious competition from the domestic e-commerce company Flipkart ,and Amazon an international based online retail giant amid a sulky e-commerce market.
Jasper Infotech which owns the company along with Softbank have discussed about the fundraising of $3-4 million, Snapdeal is still trying to raise money of higher valuation. Jasper is facing a tremendous problem in raising the funds, attempts are also leading to failure.
“Employees expenses has rose to ₹911 crores in FY 2016, 148% more than the previous fiscal. Employees Expenses is largest cost after marketing and advertising”.
CEO of Delhi based firm said that”Snapdeal is under tremendous pressure to achieve targets similar to last year with 30% less resources”. Another sources said ” The company now has an investor which has suddenly gone cold on India and is looking to right-size operations by reducing discounts,which in turn will reduce orders and requirements of staffs.