Snapdeal founders Kunal Bahl and Rohit Bansal have decided to take a 100% pay cut while acknowledging that they made an error in the execution strategy of the company by diversifying without getting the foundation right. They also said that the company would be downsizing as part of its attempts to turn profitable.
In an e-mail sent to all employees on Wednesday, the founders said that while the company had a phenomenal journey over the last few years, they erred in the execution and even started building a team size that was much larger than what was required.
“Has our company and industry been going through a troubled time? Absolutely. Did we make errors in our execution? No doubt about that,” stated the mail. The Hindu has a copy of the mail.
“We started growing our business much before the right economic model and market fit was figured out. We also started diversifying and starting new projects while we still hadn’t perfected the first or made it profitable. We started building our team and capabilities for a much larger size of business than what was required with the present scale,” it added.
They further said that while ambition is important, “a large amount of capital with ambition can be a potent mix that drives a company to defocus from its core.” “We feel that happened to us. We started doing too many things, and all of us starting with myself and Rohit, are to blame for it,” said the mail.
While both the founders have decided to forgo their salaries, some of the brass have also offered to take a pay cut.
“We believe that every resource of the company should be deployed for driving us towards profitable growth and with this announcement, both Rohit and I are taking a 100% salary cut. Many of our leaders have also stepped up proactively and offered to take a significant cut in their compensation, which is an excellent sign of how galvanised the team feels in this shared quest for profitability,” the mail said.
According to the letter, the company will also lay off many employees but did not state the exact number of staff that would be told to leave.
“As part of our overall path to profitability plan that is currently in full swing, we will be reorganizing the company into a lean, focused, and entrepreneurial one. We are combining teams, reducing layers eliminating non-core projects and strengthening the focus on profitable growth. Sadly, we will also be saying really painful goodbyes to some of our colleagues in this process. This is by far the hardest decision that we have ever taken in our lives,” stated the letter.
