Snapdeal initiates payouts to fired staff, offers retention bonus to existing employees

Two months after Snapdeal laid off large number of its workforce across its major business units, the company has initiated payouts to the affected employees.

The e-commerce major had previously fired many of its employees in a bid to cut costs.

ALSO READ: Seven-member board to discuss Snapdeal sellout to Flipkart today

The online retailer has now initiated severance packages to its ex-employees and is in course to meet the deadline it set for the payouts, reported The Economic Times.

This is expected to comprise two and four months' of employee salaries.

The number of employees affected by the layoffs ranges between 1,000-1,500 across Snapdeal, Freecharge and Vulcan Express, said ET.

Additionally, over 4-5 per cent of the company's shareholding is reserved for employee stock options (Esops) which have seen a drop in value in the past few months.

When once valued at $ 6.5 billion, Sanpdeal is now under talks for a sell-out to rival Flipkart at $1 billion.

Snapdeal employees have already begun to write off their esops which will be worth around $ 40-50 million now.

Many investors and employees have said that the value of their shares and options were shed up to 90 per cent.

A former employee's esops was worth Rs 7-8 lakh which have now dropped to the value to Rs 1.8 lakh, reported ET.

However, employees at the company's e-wallet arm which saw 100 layoffs have received their full and final settlements in the second week of April.

Snapdeal reportedly hiked the salaries of its existing employees by 12-15 per cent to retain them

While junior employees and staff at Freecharge received 12 per cent and 10 per cent hike respectively, associate directors and above got only 7-9 per cent hike.

Apart from hikes, director level staff onwards were offered retention bonus of 2-3 months if they stayed up till June and 6 months retention bonus if they stayed back till November.