India's largest e-commerce platform, Flipkart, is undertaking a workforce reduction exercise, potentially shrinking its team size by 5-7%, according to sources familiar with the matter. This move, to be completed by March-April, aligns with ongoing performance reviews and reflects the company's annual practice of performance-based job reductions implemented for the past two years. Additionally, Flipkart has frozen fresh hiring in the past year to control costs.
This news comes amidst Flipkart securing $1 billion in fresh funding from Walmart and other investors, as first reported by The Economic Times on December 21. The company, India's largest e-commerce player with 22,000 employees excluding fashion portal Myntra, is "planning better utilization of resources across businesses, both existing and new, a source revealed. A strategic gathering of senior executives next month will further discuss and finalize the restructuring plan and roadmap for 2024, ET reported.
However, there are no immediate plans to revisit the delayed public offering (IPO) originally slated for 2024, sources confirmed. While Flipkart considered an IPO during 2022-23, those plans have been put on hold for at least this year. Flipkart did not respond to an email seeking comment.
The proposed restructuring aligns with a broader trend of rationalization among large Indian internet firms, many of which aggressively hired in 2021 fueled by record fundraising during the pandemic-driven surge in demand for technology services.
This internal reorganization coincides with Flipkart reassessing its current and future ventures. Cleartrip, a travel portal acquired in 2021 with a 20% stake held by Adani Group, has surpassed $1.5-1.7 billion in gross merchandise value (GMV) and is poised for further investment. Flipkart aims to double down on the hotel booking segment within Cleartrip, which currently focuses primarily on airline reservations.
As per an ET report, in September of the previous year, Flipkart consolidated the crucial technology and product functions of its recent acquisitions, Cleartrip (travel) and Flipkart Health Plus (epharmacy), into the core commerce team to enhance operational efficiency. Additionally, Flipkart-owned Myntra implemented a workforce reduction of at least 50 positions in July, with a focus on prioritizing its prominent private labels. Despite receiving $600 million in fresh capital from parent company Walmart as part of an ongoing $1 billion funding round, the senior management at Flipkart is actively seeking ways to reduce expenditures across various categories.