Mumbai: Voonik has said it is starting a massive cost cutting exercise and has asked its 200 of total 350 workforce to not take 3 months’ salary for now, according to a report in Times of India that cited some unidentified people familiar with the development.
The company has clarified it will later give the due salary to the employees. Sujayath Ali, co-founder CEO of the fashion e-tailer, says employees who would resign will be given one month's salary.
A similar episode occurred a few months back at local e-commerce major Snapdeal that was forced to cut hundreds of jobs as the company struggled to raise funds. The report quoted sources as saying Voonik that had till recently undertaken rampant hiring was not in a position to sustain its highly paid executives.
“Voonik competes with bigger rivals like Myntra-Jabong and Amazon as well as vertical players like Limeroad, and has not been able to scale its business after having raised around $30 million in equity capital,” TOI report said.
Ali added Voonik was currently one or two months away from earnings before interest, depreciation, tax and amortisation (EBIDTA) profitability. According to him restructuring certain teams was among the possible ways out. The company had spent a lot of money on marketing and advertising last year that caused it huge cash burn.
The TOI report further said Voonik recorded a loss of over Rs 84 crore and garnered a revenue of Rs 16 crore in 2016 fiscal year, according to reports quoting filings from the Registrar of Companies (RoC).
Updated Date: Nov 14, 2017 17:04 PM