E-commerce platform, ShopClues has laid off about 200 employees, even as it struggles to manage finances in a highly-competitive online shopping landscape in India. The online shopping website, once among the elite list of ‘unicorn’ startups in India, has made the move even as its efforts to find a buyer have failed.
This is for the first time any Unicorn in India has been pushed into such a shamble state. The recent developments have raised concerns over ShopClues’ fate, and it’s likely a dead-end for the unicorn that was once considered as disruptor in Indian e-commerce space.
A 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.”
The road towards fall for ShopClues seemed inevitable when Snapdeal lost acquisition interest in it. Since the company was falling, it was expected to affect several hundred involved in either causing the fall or preventing the fall – employees.
While many saw this coming and were exploring opportunities elsewhere for several months, some have cried foul as they have not been given time to find their next employers.
Sensing that it might soon shut operations, the company has fired over 200 employees across functions like marketing, operations, tech, admin, and human resource.
The company is left with almost no money and that is why it didn’t even pay the two months standard pay-out to employees.
Some sources also revealed that ShopClues is trying to find a blueprint 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,”
It’s worth noting that ShopClues was in talks for an acquisition by Snapdeal for several months. However, Snapdeal backed out because of the amount of money it owed to Google, Facebook, and several third-party vendors including logistics partners.
ShopClues (which is registered as Clues Network) posted losses of Rs 2.08 billion (Rs 208 crore) for the year ended March 2018. The company – which has raised about $250 million so far – focuses on Tier II and III cities.