Walmart-led ecommerce giant Flipkart has kicked off an exercise to trim its workforce that could likely see its total team size reduced by 5-7%.
The workforce reduction is expected to conclude by March-April and is part of the ongoing performance reviews, ET reported, citing people close to the development.
For the last two years, Flipkart has annually implemented performance-based job reductions. In the past year, the company also paused fresh hiring as a cost-control measure. Reportedly, the firm is currently closing $1Bn financing from Walmart and others.
“Better utilisation of resources is being planned… across businesses — existing and new,” one of the persons mentioned above said. The company’s restructuring and the roadmap for 2024 will be discussed and crystallised by next month.
However, there are no plans to revisit its decision to put off public offering for 2024, as per ET. Flipkart had considered launching an IPO during 2022-23, but those plans have been put on hold, at least for this year. At the time, Walmart, holding the majority stake in Flipkart, expressed that despite acquiring Tiger Global’s stake, the long-term ambition of the ecommerce giant remains an IPO.
Large Indian internet firms have been rationalising teams after they aggressively hired in 2021, fueled by record fundraising during the pandemic-driven surge in demand for tech services.
According to Inc42 data, over 35,000 startup employees lost their jobs since the onset of the funding winter in Q1 2022. However, industry experts suggest that more than 5,000 layoffs have gone unreported.
Reportedly, Paytm laid off over 1,000 employees, aiming to reduce costs and realign its business strategy, resulting in a 10-15% downsizing of its workforce. Similarly, Amazon and SoftBank-backed Meesho have also implemented job cuts and business restructuring.
Flipkart-owned Myntra cut at least 50 jobs in July, as it wanted to focus on its top private labels.
The proposed restructuring at Flipkart comes when it is reassessing existing and new lines of business.
Flipkart’s efforts to drive various synergies internally have been in the works for months now. Last September, Flipkart 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.
Recently, Flipkart also launched a new business-to-business (B2B) platform OppDoor to help ecommerce companies looking to expand into new regions.
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