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Snapdeal laying-off over 500 employees; Co-founders pledge 100pc salary cut

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CIOL Writers
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Online marketplace Snapdeal has announced a slew of measures to steer its ship amidst cash crunch and fierce competition from Flipkart and Amazon.  Firstly, the startup — backed by the likes of Alibaba and Softbank is laying off nearly 500-600 employees as part of the restructuring. Apart from the job cuts, in an email to employees, the co-founders- Kunal Bahl and Rohit Bansal have announced that they will forego their salaries taking a “100% salary cut”.

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“On our journey towards becoming India’s first profitable e-commerce company in two years, it is important that we continue to drive efficiency across all parts of our business, which enables us to pass on the value to our consumers and sellers,” a Snapdeal spokesperson told Techcrunch. “We have realigned our resources and teams to further these goals and drive high-quality business growth,” he added.

Both Bahl and Bansal have also pledged to take a 100 percent salary cut while stating that several of their colleagues had also agreed to a reduction in compensation. Last year, the co-founders drew total compensation of about Rs40 crore each (including stock sales).

Bahl also said in the email that Snapdeal (Jasper Infotech Pvt. Ltd) had started to expand its business much before “the right economic model and the market fit was figured out.”

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“Has our company and industry been going through a troubled time? Absolutely. Did we make errors in our execution? No doubt about that. Over the last 2-3 years, with all the capital coming into this market, our entire industry, including ourselves, started making mistakes,” he added.

The decision to not take salaries, something common in the Silicon is perhaps unprecedented in India’s startup ecosystem. Besides layoffs, the company is also shutting down non-core projects to conserve cash as it looks to effect a turnaround.

The company has been struggling to raise funds for its digital payments platform FreeCharge, while also seeing dipping sales across the e-commerce platform. Consolidated cash and current investments for 2015-16 stood at Rs 3,278 crore.