In a bid to cut losses, some e-commerce platforms are handing out pink slips to some of its staff to cut costs. E-commerce platform ShopClues laid off about 200 employees as it struggles to rein in costs in the hyper-competitive online shopping segment in India. According to sources, ShopClues has sacked about 200 people as its efforts to find a buyer failed.
A ShopClues spokesperson told PTI the company has been steadily reducing its workforce mostly in operating functions as it leverages gains from technology. “We have always been an employee-first company and have ensured that impacted employees, if any, are outplaced proactively,” it added.
Recently, ShopClues was in talks with larger rival Snapdeal for a potential acquisition.
However, after weeks of due diligence, Snapdeal decided against the acquisition as there are concerns regarding some of the findings emerging from the due diligence conducted by advisory firm EY.
There were reports earlier indicating the deal would not go through. A report in The Hindu said the Snapdeal-ShopClues deal was unlikely to come through on account of Shopdeal's inability to raise funds that had resulted in a steady decline in orders.
There have been speculations that with the discussion failing to materialise, ShopClues—which has nearly 500 employees—would be forced to downsize rapidly to stay afloat.
ShopClues (which is registered as Clues Network) posted losses of Rs 2.08 billion (Rs 208 crore) for the year ended March 2018. The company—which has raised about $250 million so far— focusses on tier II and III cities.
Startups losing steam?
Recently, Gurugram-based logistics startup Rivigo reportedly handed the pink slips to up to 100 staff in the past few months under pressure from investors to reduce costs.
Rivigo, backed by Warburg Pincus and SAIF Partners, reportedly laid off 70-100 employees, mainly its freight marketplace team.
It also reportedly rolled back around 50 offers from 10 premier campuses, including National Institute of Industrial Engineering, Indian School of Business, Indian Institute of Technology (IIT), and Indian Institute of Management (IIM), before the joining dates, said a report in The Economic Times citing documents accessed by it.
Urban Ladder, the design-led omnichannel brand, laid off nearly 90 employees in the March quarter this year. The startup was struggling to raise more funds, media reports said. This was the second time the startup was laying off people. In 2016, the company had handed out pink slips to some employees.
Last week, Treebo Hotels, owned by hospitality company Ruptup Solutions, laid off around 20 percent of its workforce i.e. approximately 100-120 employees, according to a report in The Economic Times. The company was expecting a 'large' investment of $40 million by a French hotel chain Accor in Treebo. In July last year, Treebo had laid off 70-80 employees after online travel agency MakeMyTrip stopped listing the company on its platform, the report said.
Recently, employee count was halved at Kalaari Capital-backed Rubique Technologies Pvt. Ltd, an online lending marketplace due to liquidity crisis in the non-bank lending sector (NBFCs). Manav Jeet Singh, founder and chief executive, told Mint, "We had to rationalize various cash outflow items like infrastructure and admin cost, business support cost, etc. and, thus, we decided to trim resources from support functions like telecalling, technology, marketing and business support, etc.'
--With PTI inputs
Updated Date: Jul 19, 2019 12:00:14 IST