The road towards fall for ShopClues seemed inevitable when Snapdeal lost acquisition interest in it. Since the elephant (Unicorn) was falling, it was expected to affect several hundreds involved in either causing the fall or preventing the fall – employees.
Sensing the wind that is taking ShopClues in direction of ceasing operations, the company has fired over 200 employees across functions marketing, ops, tech, admin, and human resource.
According to multiple sources including over a dozen employees, ShopClues has laid off about half of its workforce this week. “About 200 employees were asked to leave today by their respective team managers. The company is left with almost no money and that is why it didn’t even pay the two months standard payout to employees,” said sources.
About half a dozen employees confirmed that they also got compensation of about one and a half months’ pay. “The message that was communicated to us mentioned that the company is laying us off because of low performance. However, everyone knows – that’s not the case,” they added.
While many employees saw this coming and were exploring opportunities elsewhere for several months, some cry foul as they have not been given time to find the their next employers. Notably, several companies such as Cars24, UrbanLadder, Rubique, Treebo and Rivigo had collectively laid off over 1,000 employees over the past few months.
“We knew this might happen but at least expected leadership team or co-founders to announce this. The company didn’t even bother to send an official email on the layoff,” said employees. Sources also emphasised that salary and compensation of the leadership team have been cut by 70%.
It’s worth noting that ShopClues was engaged in conversation for acquisition by Snapdeal for several months. However, Snapdeal backed out because of the amount of money ShopClues owed to Google, Facebook, and several third-party vendors including logistics partners.
Entrackr had exclusively reported about ShopClues acquisition by Snapdeal and its fall through.
In response to our detailed queries, ShopClues spokesperson said, “We have been steadily reducing our workforce mostly in operating functions as we leverage gains from our technology. Our customer NPS has been increasing steadily for the last 2 years while our workforce has dropped by 50% in this time period. We have always been an employee-first company and have ensured that impacted employees, if any, are outplaced proactively. We hold this to the core of our culture.”
Some sources also revealed that ShopClues is in the conversation for a stressed deal with FutureBazaar and few others. “It’s very unlikely that ShopClues would find a buyer from here. If someone acquires it then the deal would be largely meant to save taxes,” they added.
This is for the first time any Unicorn in India has been pushed into such a shamble state. Nevertheless, such a situation could be possible with the company of any size and scale if business fundamentals are ignored. While we aren’t sure about ShopClues’s fate, it’s likely a dead-end for the Unicorn that was once considered as disruptor in Indian e-commerce space.