Zomato, the restaurant listing and services company which is valued around $1 billion, might fail to meet its sales target for the current financial year, according to an email co-founder and CEO Deepinder Goyal sent to the staff on Friday.
In a long mail that Goyal first sent to the company’s sales team and later forwarded to all employees, he talked about the underperformance of the sales team and how it might result in the company missing its revenue targets.
“We are far behind the numbers that we promised our investors for this financial year (year ending March 2016) – our investors have said that so far, we have always delivered what we have promised. We are close to not living up to that for the first time in the last 5 years,” Goyal said in the email.
The email came a fortnight after the company sacked about 300 employees globally, or 10 per cent of its total workforce. Zomato has also been facing difficulties in retaining top-level staff as a number of senior executives have left the company after short stints.
The company has so far raised $225 million and spend a large portion of it in acquiring companies in its bid to build a global business. It is believed to be valued around $1 billion following the fourth round of capital infusion in early September.
An email sent to the company spokesperson seeking response on Goyal’s email to staff did not immediately elicit a response.
In his email, Goyal also said that Zomato’s sales team more than quadrupled in 2015. “The hard reality of this growth is that our revenue hasn’t kept up with the growth in our sales team,” he said.
Goyal said that sales executives are facing “motivation issues” and that they are meeting far fewer clients every day than the ideal number. “The fact of the matter is that our sales team is not firing on all cylinders,” he said.
Goyal made an attempt to address this issue through the mail. He wrote that some employees felt “insecure” about their jobs and that they thought a few of their colleagues were sacked for no reason. He justified firing, but said only those employees were laid off who constantly underperformed and did not take feedback seriously.
Goyal also sought to clarify some other concerns about slow promotions, lateral hiring of area sales managers and lack of stock options. He said that 17 per cent employees at Zomato had stock options. “That’s a very large number compared to a lot of startups I know of.”
“The reason you don’t have stock in Zomato yet, is probably because you haven’t consistently made a point that Zomato needs you badly for the next 4 years,” he said. “For us, stock is not a part of compensation and perk-based motivation. For us, stock is a gesture that we want these folks to be at Zomato for a long time to come.”