Walmart-owned Flipkart has embarked on a retrenchment initiative that could reduce its total workforce by five to seven percent, according to a report in The Economic Times (ET). The move is part of the company’s annual performance-based job cuts, which have been in effect for the past two years. The process is expected to be completed by March-April in line with the ongoing performance review and the end of the current financial year.
The e-commerce giant, with 22,000 employees (excluding Mintra), has been proactively managing costs, including adding new hires over the past year. Currently, the company is finalizing a $1 billion funding round from Walmart and other investors, the ET report added.
The job cuts align with Flipkart’s focus on better resource utilization in existing and new businesses. The company is set to discuss and finalize the restructuring plan and roadmap to 2024 at an upcoming gathering of senior executives scheduled next month.
Despite the job cuts, there appear to be no plans to reconsider Flipkart’s decision to postpone its public offering until 2024. Flipkart had initially considered launching an IPO by 2022-23 but decided to put those plans on hold.
As previously reported by Business Standard, Flipkart recorded a 42 percent growth in operating income, reaching Rs 14,845 crore by the end of December for the current financial year (FY23). According to data accessed by business intelligence platform Toffler, Flipkart’s total loss fell nine percent to Rs 4,026 crore. Total expenses increased 26 percent to Rs 19,043 crore, with a significant portion allocated to logistics, employee benefits and advertising expenses.
