In what could be the near-end of e-commerce player ShopClues, this Gurgaon-based online marketplace has reportedly terminated almost 50% of its workforce abruptly. According to an Economic Times report, employees received an email asking them to assemble at a point where they were not only told that they've been fired but also that they get paid only till July 18 and no severance pay will be given. Most of these employees are reportedly from the operations team.
The company used to have around 600 employees till April, when they effected a downsizing and the number came down to around 400. Another 150 to 200 have been shown the door on Wednesday leaving only around 200 to work for the company. There is no official word from the management on this development, but it is learnt that the organisation had issued a warning in April itself that people should look for jobs elsewhere. Whoever managed to get one had left.
An Inc42 report quotes a ShopClues spokesperson as saying that the company has been reducing its workforce for the past two years and has been using automation and technology to fill those gaps. The spokesperson further said that the company's focus has been on profitability as it reduced its workforce by 50% in the past two years. It plans to achieve that this year.
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There was one lifeline ShopClues had until some months back: Being taken over by Snapdeal. However, that did not take place following a disagreement over the valuation of ShopClues. The valuation of $300 to $350 million was perhaps not acceptable to Snapdeal. Just 3 years back, the same ShopClues was valued at $1.1 billion. The real hitch is said to be the huge amount of liabilities that ShopClues is carrying, which included tax dues and payments to vendors for supplies made. The orders on its platform have been dwindling as well. Shopclues had held talks with Paytm too.
When the going was good, ShopClues had no difficulty in raising funds. VCs like Tiger Global, GIC Singapore, Nexus Venture Partners and Helion Ventures Partners have made investments in the startup and a total of $250 million has come in. With the situation being so bad, the promoters might have to virtually resort to a fire sale to limit their losses. A completely shutdown operations may not find any takers even.