At Voonik, there are plans of restructuring teams as the company cannot afford to hold on to its high paid executives.
Around 200 employees of fashion retailer Voonik are staring at three months of unpaid job as the company is on a cost-cutting spree, reports Times of India.
The Bengaluru-based firm is facing issues similar to that seen earlier this year by Snapdeal. The online retailer was unable to raise funds that led to lay-offs of hundreds of employees.
At Voonik, there are plans of restructuring teams as the company cannot afford to hold on to its high paid executives. Out of the 350 people working in the company, teams that will face the axe are product development and customer support. The operations team will not be affected by this move.
At a meeting on Monday, Voonik’s CEO and Co-Founder Sujayath Ali said those who will quit the company will get a month’s salary as the severance package. He added the company “is currently one or two months away from EBITDA (earnings before, interest, tax, depreciation, and amortisation) profitability.
To achieve this Ali said there will be changes in the employee structure. Thus, asking the staff to forgo their salary for three months. “We have done this exercise in the past as well and we always have paid back the deferred salary," he further said.
According to company’s record filed with the Registrar of Companies (RoC), Voonik said its losses have increased by eighteen times thanks to an increase in expenditure.The company was rampantly hiring until last year and had also spent huge sums on marketing and advertising. Although Ali said the company’s burn rate is under control, the firm sustained major cash burns. And now, the senior-level employees at Voonik are preparing to put down their papers as the company’s future is uncertain.