E-commerce giant Flipkart has initiated a performance-based workforce reduction initiative, intending to decrease its total team size by 5-7 per cent, reported The Economic Times, quoting sources familiar with the matter. The process is anticipated to be completed by March-April this year.
The move comes as Flipkart grapples with the need for cost control, having frozen fresh hiring over the past year. The company has been implementing annual, performance-driven job reductions for the last two years. With a current workforce of 22,000 employees (excluding Myntra), Flipkart is aiming for better resource utilisation across existing and new business verticals, according to a source quoted in the report.
The restructuring plan, along with the roadmap for 2024, is expected to be discussed and finalised at an upcoming gathering of senior executives next month. Despite the workforce adjustments, there are no plans to revisit the decision to postpone its initial public offering (IPO) until 2024, added the report.
Flipkart Layoffs to cut costs
Paytm, Meesho, Amazon have recently undergone similar cost-cutting measures and workforce restructuring to align with evolving business strategies and economic conditions.
As Flipkart looks to reassess its existing and new lines of business, the company is also exploring synergies with entities like Cleartrip, where Adani Group holds a 20 per cent stake. Cleartrip, focusing on airline bookings, is set to receive increased investment from Flipkart, particularly in its hotels business, added the ET report.
While Flipkart has faced ups and downs in the e-commerce industry throughout 2023, the proposed restructuring aims to navigate challenges and position the company for sustainable growth, added a source quoted in the report.
The ongoing $1 billion financing from Walmart and others is expected to play a crucial role in supporting Flipkart’s strategic initiatives.
Flipkart’s emphasis on grocery, social commerce (Shopsy), and forays into the fintech space (Super.money) highlights its broader strategy to diversify offerings and expand total user base.
With a focus on smartphones, large appliances, and fashion as core business segments, Flipkart aims to balance its growth across multiple sectors. The company’s leadership, led by Group CEO Kalyan Krishnamurthy, is also focused on scaling new businesses and ensuring long-term success in the dynamic e-commerce landscape.
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