To Save Co, Snapdeal Bosses Try SpiceJet Chief ’s Route

Ku­nal Bahl and Ro­hit Bansal de­cide to forego their salaries to share the pain of the staff and lift their morale amid cost cuts and ef­forts to turn around co

The Economic Times - - Brands & Companies -

Mi­hir Mishra & Biswarup Gooptu

New Delhi: When on­line shop Snapdeal founders Ku­nal Bahl and Ro­hit Bansal told anx­ious staff that they would share the pain of the rank and file, they were fol­low­ing a lofty ex­am­ple: SpiceJet Chair­man Ajay Singh had fore­gone his monthly en­ve­lope un­til the founder­ing air­line re­vived.

Ac­cord­ing to sources, Bahl, Bansal and Singh met for lunch in Jan­uary and over the meal the founders de­cided to lead by ex­am­ple. Singh fol­lowed up the lunch en­gage­ment with a visit to Snapdeal’s Gur­gaon of­fice on Fe­bru­ary 1 to tell the top man­age­ment ways to re­vive the re­tailer, sources told ET. “The lunch meet­ing be­tween the two founders and Singh also dis­cussed change in strat­egy from go­ing af­ter mar­ket share through dis­counts to work­ing to­wards prof­itabil­ity. The founders were also ad­vised by Singh to lead by ex­am­ples and take a pay cut be­fore go­ing for a pay cut of its em­ploy­ees,” said a source in the know, who did not want to be iden­ti­fied.

An email sent to Snapdeal did not elicit any re­sponse un­til the re­port went to print. How­ever, a spokesper­son con­firmed to ET that Singh had vis­ited the Snapdeal of­fice. When con­tacted, Singh de­clined to com­ment on the is­sue.

Singh is cred­ited with turn­ing around SpiceJet af­ter the air­line went into par­tial clo­sure in De­cem­ber 2014. He did not take any salary for about 15 months af­ter join­ing the air­line in Jan­uary 2015. On Wed­nes­day, Bahl and Bansal, co­founders at Snapdeal, an­nounced they would forego their salaries, be­com­ing the first among In­dia’s high-pro­file startup en­trepreneurs to do so: The move is aimed at con­serv­ing cash and cut­ting costs to turn around the for­tunes of their seven-year-old firm.

In­ter­est­ingly, the in­ter­nal let­ter, sent to em­ploy­ees, also men­tions SpiceJet as a suc­cess­ful com­pany that had gone through a phase of down­turn.

“…That said, there is al­most no suc­cess­ful com­pany on the planet which hasn’t gone through this phase in their life­time — Ap­ple, Ama­zon, Net­flix, Tesla, Lego, Spicejet, you name it! This will mean tough choices and a con­scious depar­ture from a me-too race to the edge of the cliff. Let’s re­mem­ber: GMV is van­ity, Profit is san­ity,” reads the let­ter sent to em­ploy­ees on Wed­nes­day and re­ported by ET on Thurs­day. GMV, or gross mer­chan­dise value, is an in­dus­try term for the to­tal value of mer­chan­dise sold on an e-com­merce site. Dur­ing Singh’s Fe­bru­ary 1 visit, Snapdeal’s top man­age­ment asked the SpiceJet turn­around man a lot of ques­tions on the air­line’s re­vival, em­ployee morale and com­pe­ti­tion. “Se­nior man­age­ment at Snapdeal wanted to know about ways to deal with the low morale of em­ploy­ees and steps taken by Singh to turn around SpiceJet,” said the source.

Em­ploy­ees were in­ter­ested in learn­ing about ways to ‘deal with a large well­funded com­peti­tor that is go­ing af­ter mar­ket share,’ said the source.

SpiceJet Chair­man Ajay Singh had fore­gone his monthly en­ve­lope un­til the floun­der­ing air­line re­vived

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