Flipkart is set to reduce its team size by 5-7 percent through performance-based job cuts, a move part of the e-commerce giant's ongoing restructuring plan. The layoffs will be determined by annual performance reviews and are expected to be completed by March-April. Flipkart, a major player in India's e-commerce sector, owned by Walmart, is focusing on optimizing resources and operations in its restructuring efforts. Excluding Myntra, Flipkart currently employs 22,000 individuals. This isn't the first time the company has implemented performance-based job cuts, as similar exercises have been conducted over the past two years.
As part of its cost-control measures, Flipkart has refrained from new hiring in the past year. The company is in the final stages of a $1 billion financing round, with contributions from Walmart and other investors. Sources suggest that Flipkart aims to enhance resource utilization across its existing and new ventures. Discussions and decisions related to the restructuring plans and the 2024 roadmap are expected in a meeting involving senior executives in the coming month.
Despite the ongoing restructuring, Flipkart has decided to defer its initial public offering (IPO) until 2024, postponing previous plans for an IPO in 2022-23. Flipkart's strategic ventures, including the recent acquisition of Cleartrip, part-owned by the Adani Group, have achieved a gross merchandise value (GMV) of approximately $1.5-1.7 billion. The company plans further investments in its hotel business and aims to expand Cleartrip's services beyond airline bookings.
Insiders reveal that Flipkart has been diligently working on internal synergies for several months. The restructuring aligns with the company's goal to reassess current and future business trajectories. While securing $600 million in fresh capital from parent company Walmart as part of the ongoing $1 billion round, Flipkart's senior management actively seeks ways to reduce expenses across different categories.
The trend of team rationalization is not unique to Flipkart, as various major Indian internet companies, buoyed by high demand for technology services in 2021, are now rationalizing their teams. Experts anticipate similar actions from other venture-funded Indian organizations throughout 2024. Flipkart's restructuring mirrors the e-commerce industry's adjustments in response to the changing dynamics in 2023, emphasizing the annual appraisal cycle as a driver for team restructuring efforts, optimizing operations and resources.
