Source | www.gadgetsnow.com : By Digbijay Mishra
Sequoia Capital-backed fashion focused e-tailer Voonik has told 200 employees that the Bengaluru-based company won’t be able to pay them their salaries for the next three months as it undertakes massive cost-cutting measures, people directly aware of the matter said. The company has a total workforce of about 350 people. The affected workforce is largely in product development and customer support, while the operations team won’t be a part of this move, at least for now.
In an all-hands meeting on Monday, the company’s co-founder and CEO Sujayath Ali said that employees who would resign will be given one month’s salary, people who were present told TOI. Voonik’s mass firing is reminiscent of what happened earlier this year at the online marketplace Snapdeal which asked hundreds of its staff to leave as it struggled to raise funds.
Voonik, which competes with bigger rivals like Myntra-Jabong and Amazon as well as vertical players like Limeroad, has not been able to scale its business after having raised around $30 million in equity capital. Sources said the fashion e-tailer, which had gone on a hiring spree especially for senior roles, is not in a position to sustain those highly paid executives. The online marketplace, which spent lavishly on marketing and advertising till last year, incurred a mounting cash burn even as it had been unable to rack up new funds.
Sources said many of these senior level executives are now in the process of resigning as the company stares at an uncertain future. Other vertical e-commerce sites like Craftsvilla and Zivame have also gone through major restructuring amid tough fund-raising conditions and businesses that have found it difficult to compete with the might of Myntra-Jabong and Amazon.