Snapdeal to cut wage costs by over 60%

BENGALURU/GURGAON: Snapdeal is looking to slash its salary and bonus costs by 60% as the embattled e-commerce firm rationalises operations and reduces headcount dramatically, multiple people aware of the developments said.

The online marketplace is now merging some of its major categories where mobiles and electronics will be clubbed into one to save costs, said sources who did not want to be named as the information is sensitive. This comes on the back of rising salaries and bonuses amounting to Rs 673 crore for the financial year 2015-16, compared to Rs 217 crore a year ago.

With reports of job cuts impacting more than 1,000 employees, there's an atmosphere of chaos and confusion at the Snapdeal headquarters. ASF Towers, where the online retailer used to house 3,000 people, now wears an air of uncertainty. One of the employees at the company said, "I think we will know by Friday or Monday about the job cuts." A few people TOI spoke to outside the e-commerce firm's office premises said, "We are aware of the layoffs but don't know the details."

At its peak, the SoftBank-backed e-tailer had an employee strength of 8,000 as of August 2015, which the company aims to cut by more than 60%, sources said. A lot of the shedding has been taking place in phases since midlast year.

Snapdeal's troubles are a fallout of its declining market share and its struggle to raise fresh capital as it fights out bigger rivals Amazon and Flipkart. TOI reported earlier that the company's gross sales have plummeted to around $1 billion, a drop of 50% over a year in the backdrop of muted growth in the overall e-commerce market. The Kunal Bahl and Rohit Bansal-founded e-tailer has been implementing a series of cost-cutting measures to conserve cash and extend its runway, as reported by TOI.

A Snapdeal spokesperson responded to TOI's query and said, "On our journey towards profitability, we continue to drive efficiency in all aspects of our business. As in the past, and like all efficient companies do, we will continue to assess resource allocation to further our goals of enhancing customer and seller experience while driving high quality growth."