Ecommerce marketplace Snapdeal is laying off close to 600 people within the company’s logistics unit Vulcan Express, and in its payments division FreeCharge, according to this PTI report. A spokesperson from Snapdeal confirmed the development with MediaNama but did not comment on the number of people being laid off. The spokesperson added that employees will be given a three-month severance pay and that its offices in Gurgaon (where Vulcan operates from) and Bangalore (FreeCharge) will be affected due to the layoffs.
The PTI report said that the company had initiated restructuring process last week and that employees from different levels of management would be affected. Snapdeal said in a statement that it is “rationalizing part of its workforce on its journey to become India’s first profitable e-commerce company in two years”. The company added that it will “realign its resources (in logistics, payments) to become a leaner and more efficient business.”
Layoffs at Snapdeal comes at a time when the company is going through a rather rough phase with internal management shuffles, multiple top-level exits, and phasing out of subsidiary units. Earlier this month, Snapdeal shut down its C2C handicrafts marketplace Shopo. Last year, it merged Exclusively.in, a luxury fashion store it had acquired in 2015. The Exclusively.in website was discontinued and does not accept orders from users, but the brand name remains intact.
Management shuffle and exits
On Wednesday, FreeCharge’s CEO Govind Rajan quit the company after being appointed to the role in May 2016. Last month, Snapdeal appointed Housing’s CEO Jason Kothari as its Chief Strategy and Investment Officer, following the exit of Vijay Ghadge, COO of Vulcan Express. Kothari will now take care of FreeCharge’s business operations as well. Apart from this, two top executives including Abhishek Kumar, the company’s head of corporate development, and senior vice president Sandeep Komaravelly had put down their papers.
Note that Snapdeal had acquired FreeCharge in 2015 for $450 million. Snapdeal continues to maintain FreeCharge as a separate entity with an independent management team. However, both Snapdeal and FreeCharge cross-sell each other’s businesses on their websites and apps.
Financials and Funding
According to this Livemint report, Snapdeal’s losses stood at Rs 3,316 crore during the financial year ended March 2016 (FY16). This is up 150% YoY from Rs 1,328 crore losses reported in FY15. Overall revenue stood at Rs 1,457 crore during FY16, which is up 56% YoY from Rs 933 crore in the same period last year. The company had raised $21 million from Luxemburg-based investor Clouse SA in August last year. Apart from this, it had raised $200 million in 2016, $500 million in 2015, and close to $627 million in 2014.