Fashion e-tailer Voonik asks staff to forgo 3 months' salary

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 deferring salaries 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 competes with bigger rivals like Myntra-Jabong and Amazon as well as vertical players like Limeroad, and 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 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.
 
When contacted, Ali confirmed the development. “Voonik is currently one or two months away from EBITDA profitability. One of the measures is restructuring certain teams. As part of this exercise, we have requested these team members to self-select to being part of our last leg of journey towards profitability, which includes deference of salary if required. We have done this exercise in the past as well and we always have paid back the deferred salary.”
 
Besides Sequoia, Voonik counts as its investors RB Investments, Japanese e-commerce operator Beenos, Singapore-based venture capital fund Beenext, Tancom Investments and Times Internet, the digital product and investment arm of the Times Group, the publisher of this newspaper.
 
As of the fiscal year 2016, Voonik clocked losses of over Rs 84 crore with a revenue of Rs 16 crore, according to reports quoting filings from the Registrar of Companies (RoC).
Shoot

Trending News

Online companies are now selling meat and a new perception

Infosys enters JV in Japan; to pay about 2.7 billion yen

Naspers and CPPIB back Byju's, valuation jumps to $3.6 billion

Small sellers on Amazon, Flipkart seek PMO help to safeguard their interests

RBI seeks opinion of Indian govt & NPCI on WhatsApp's payment approval delay

Google+ to now shut down in April after finding a new privacy bug that affected 52.5M users

Indian govt likely to meet FY19 digital payments target

Obopay partners with Federal Bank & Mastercard to launch its own prepaid card for corporates

UrbanClap facilitates ESOP sale for upto Rs 18 crore

Walmart to tap Flipkart's tech expertise

Snapdeal claims to have added 50,000 sellers in last 12 months

Amazon targets airports for checkout-free store expansion

PayU India’s valuation estimated at $2.5 billion: Citi report

Amazon India & Flipkart are on similar run rate of $11.2B: Barclays

Tencent Music presses play on $1.2 billion U.S. IPO

Instagram Shopping may launch in India in 2019: Report

PhonePe users can now directly book IRCTC train tickets on the app

Facebook opens monetisation features for Indian content creators

UrbanClap raises $50M from Steadview Capital & Vy Capital

Xiaomi India nears Rs 23,000 cr in revenue within 4 years of operations

Paytm's unlisted owner One97 tops ₹1 lakh crore in valuation

Amazon may buy out Kishore Biyani's Future Group in new business deal

With $1.8B, Bessemer looks to make bets across fintech, healthcare technology & SaaS

Agritech startups Sabziwala and LivLush merge their business under new entity Kamatan

Avail Finance lands $17.2M from Matrix Partners & Ola, Freecharge and Flipkart founders

RBI suggests tax sops, self-regulation to build fintech space

Swiggy hires new CEO for its Access Service, gets new CFO

Logistics company Delhivery registers 44% increase in FY17 revenues

WeWork to acquire one of the oldest social networks, Meetup

Qualcomm rejects Broadcom's $103 billion offer

EasyRewardz gets $2 million Series-A funding

'Anemic' iPhone 8 demand drags Apple shares lower

Lending platform Lenden Club gets Rs 3.5cr in Equity Investment

On festive sales, Flipkart says 65% clients from Tier-II cities