In the aftermath of Snapdeal ‘rationalising part of its workforce’ on its way to becoming a profitable entity in the next two years, online sellers have reportedly asked the commerce minister Nirmala Sitharaman to intervene in the matter and safeguard their money.
As Snapdeal’s troubles grow and fears of cash running out at the company spread, merchants have already gone the government route. .
A spokesperson of the AIOVA told TOI, “Ancillary industries like logistics, e-sellers, among others have already laid off a lot of the workforce in the past months. We are scared that Snapdeal may not make the payments, which were collected by them in the past month, on behalf of the sellers. Our estimate of approximately INR 200 Cr-INR 300 Cr is at risk,”
Responding to the update, a Snapdeal spokesperson told Inc42, “There is absolutely no connect between the steps taken to rationalise the team and routine business operations, including regular payment of seller dues. All dues, including the sellers, continue to be settled as per established processes and timelines without any change. Any apprehension in this regard is without basis. Business at Snapdeal continues to grow steadily towards profitability and all sellers dues continue to remain fully secure, at all times. In case of any query, sellers partners are advised to connect with the company directly and not pay heed to baseless rumors.”
Founded in February 2010, by Kunal Bahl along with Rohit Bansal, Snapdeal claims to have over 65 Mn products across 1000+ categories. Currently, it claims to have more than 300K sellers on its platform.
This move by the merchants is a ripple effect of the statement issued by the company yesterday – where the founders conveyed their intent to take a 100% salary cut. Multiple sources stated that the company will lay off about 600 people from its workforce, in a cost-cutting exercise.
Another report by Hindu Business Line states that Snapdeal may reportedly shut its offices in Surat, Hyderabad, Ahmedabad, Kolkata, Indore, and Bhopal. The report also states that it will close down some of its warehouses, as well.