Walmart-led ecommerce giant Flipkart has commenced an initiative to streamline its workforce, which could potentially result in a 5-7% reduction in its total team size. The company aims to conclude the workforce reduction exercise by March-April, as part of its ongoing performance reviews, according to sources cited by ET.
Flipkart has been implementing annual performance-based job reductions over the past two years. Additionally, the company paused fresh hiring in the previous year as a cost-control measure. Currently, Flipkart is reportedly finalizing a $1Bn financing round from Walmart and other investors.
According to sources familiar with the matter, the company is planning better resource utilization across its existing and new businesses. The restructuring and roadmap for 2024 are expected to be discussed and finalized by next month. Despite these changes, there are no plans to reconsider the decision to postpone its public offering for 2024.
Flipkart had contemplated launching an IPO during 2022-23, but those plans have been deferred for the time being. Walmart, which holds a majority stake in Flipkart, has expressed its long-term ambition for the ecommerce giant to go public, despite acquiring Tiger Global’s stake.
The trend of rationalizing teams is not unique to Flipkart, as several large Indian internet firms have been restructuring their workforce after aggressive hiring in 2021, driven by record fundraising during the pandemic-induced surge in demand for tech services.
Inc42 data indicates that over 35,000 startup employees have lost their jobs since the onset of the funding slowdown in Q1 2022. However, industry experts suggest that more than 5,000 layoffs have gone unreported. Paytm, for instance, laid off over 1,000 employees as part of its cost reduction and business realignment strategy, resulting in a 10-15% downsizing of its workforce. Similarly, Amazon and SoftBank-backed Meesho have also implemented job cuts and business restructuring.
In July, Flipkart-owned Myntra reduced its workforce by at least 50 employees, focusing on its top private labels. The proposed restructuring at Flipkart coincides with the company’s reassessment of its existing and new lines of business.
Flipkart has been working on internal synergies for months. In September, the company merged key technology and product roles of its new businesses, Cleartrip (travel) and Flipkart Health Plus (epharmacy), into the core commerce team to streamline operations.
More recently, Flipkart launched OppDoor, a new business-to-business (B2B) platform aimed at assisting ecommerce companies seeking expansion into new regions.
