• Snapdeal plans to scale down operations in regional offices

    Online marketplace Snapdeal plans to scale down operations in its regional offices including Bangalore, Mumbai, Calcutta and Hyderabad, according to multiple people within the company.

    The Delhi-based company–which launched a performance improvement plan for certain employees in February– may even shut down a few offices in the next six months, if Snapdeal doesn’t raise a fresh funding round, the sources said.

    “The accounts and vendor management teams in Bangalore have already been cut to about 45 people from 85 people a year ago,” said one of the people quoted above. “The focus has moved to the ads business,” the person said.

    Category managers, account management executives and seller onboarding team managers who spoke to ET on condition of anonymity said few employees have been asked to relocate to Snapdeal’s head office in Delhi, prompting them to resign.

    “In some cases (employees) have even been given severance packages for two months,” said one senior executive directly involved in the retrenchment plans.

    In February, ET reported that Snapdeal has placed around 200 employees on notice. These employees had been asked to undergo a 30-day performance improvement plan (PIP). Most opted out as the demands of the company’s performance improvement plan were almost impossible to meet said those aware of the developments within the company.

    A spokeswoman for Snapdeal denied reports of any scaling down regional operations. “We are relocating all our NCR-based team members to our Gurgaon campus, as the lease on other smaller NCR based locations comes to an end. The capacity in the Gurgaon campus has been designed accordingly,” in an email response to a questionnaire from ET.

    “Any team members choosing to leave for their individual reasons receive all payments due to them per their employment contract,” she wrote in the statement.

    Backed by Japan’s SoftBank, Snapdeal is engaged in a battle with two major competitors– Flipkart and Amazon– for market share in India’s competitive online retail market.

    In April, ET, citing industry estimates reported that Amazon was India’s second-largest online marketplace by shipments dislodging Snapdeal.

    According to Shreedhar Prasad, Partner – Management Consulting, KPMG, “E-commerce players are still trying to figure out the right metric to hire. Since it is a relatively new concept, they are still learning the art, which is adding to their profitability concern.”

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