Snapdeal’s laying off people, but here’s why it’s a good thing

Photo credit: Garry Knight

Today Snapdeal, India’s third largest ecommerce company, announced that it was laying off staff to “rationalize” its workforce as it aims to “become India’s first profitable ecommerce company in two years.” Sources in the company say the layoffs are going to impact roughly 500-600 employees.

That’s a whole lot of firings that have been amply covered by media.

See: Snapdeal founders to take 100% pay cut amidst layoffs. Here’s their letter to employees.

There has been much talk about how startups in India are overvalued, getting top heavy, and need to do some serious rethinking of their strategies to keep their businesses floating.

Multiple investors have told Tech in Asia over the past week that the valuation bubble is going to burst, and that it will depend on the founders and lead investors of various big-name startups to make tough calls to ensure the success of their businesses.

See: Does very high salary = lower loyalty for startup employees?

Softbank-backed Snapdeal has been losing ground to Amazon in the country, and there have been multiple reports in local media about how its future as a standalone company is threatened.

Snapdeal Co-founder Rohit Bansal. Photo credit: Snapdeal.

As founders Kunal Bahl and Rohit Bansal state in their letter to employees, Snapdeal probably holds “the record for the company that got written off the most number of times by internet pundits.”

One detects a tone of humor there, but it is time for the Indian startup community to sit up as one and appreciate the seriousness of Snapdeal’s moves today.

These few years, Indian startups have become synonymous with fragile egos, lying, crazy one-upmanship, unwarranted comments and demands, and a madness in general that does not behoove entrepreneurs building serious, world-class businesses.

See: Why I have trust issues with Indian startups