Priyanka Sahay Moneycontrol News
In an email sent to the employees on Monday, Kunal Bahl, founder and chief executive officer of e-commerce firm Snapdeal called for making Snapdeal 2.0 a success adding that the company is already profitable at gross profit level and targets Rs 150 crore in gross profit in the next 12 months.
Without dwelling much into the details, Bahl also said that there will be a need for tight control on the costs and that the company currently doesn't need to raise additional capital to reach profitability.
Following plans to run a leaner company, Snapdeal is expected to have another round of a mass exodus which may see the company becoming leaner by at least 600-800 employees.
In currently employs around 1000-1100 employees, which effectively means that the company will reduce its manpower by more than 70 percent.
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According to a senior executive who spoke on the condition of anonymity, the plan is to retain around 300 odd employees in the company.
"A list of 80 highest paid employees have been made. It mostly constitutes of non-CXOs—vice president, presidents and assistant president levels," the person said.
"The salaries of these employees will range between Rs 75 lakh to Rs 1.5 crore," the person added.
However, unlike the previous rounds of layoffs which mostly saw employees at the junior level go, this round will affect employees across all categories.
Mentioning about the deal with potential buyers, Bahl stressed that the same couldn't take place of "the deal being contemplated was incredibly complex to execute."
Moneycontrol on June 28th reported that the term sheet offered by rival Flipkart had several clauses and hold-backs including imposing legal liability on board members post deal.
With a plan to execute a pure marketplace model, Bahl stressed that there isn't going to be "one successful model for e-commerce in India."
According to him in every market, there are multiple business models and the success lies in the way it is executed.
"With the ongoing streamlining of costs and sale of some of the assets, such as Freecharge, we are financially self-sufficient as a company and don't need to raise additional capital to reach profitability. Needless to say, we will need to keep a tight control on our costs and work towards becoming a hyper efficient culture delivering profitable growth month on month," Bahl said in the letter.
Moneycontrol has reviewed a copy of the letter.
"The opportunity for e-commerce in India is immense, and the surface of this USD 200 billion market has barely been scratched yet. We have a tremendous team, millions of loyal customers, hundreds of thousands of motivated sellers and a phenomenal platform that has been built with years of effort," he added.
Moneycontrol was the first to report on June 13th that Snapdeal had a Plan B in place in case the deal with Flipkart didn't go through.
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