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.
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