Flipkart plans performance-based layoffs, anticipating 5-7% workforce reduction in March, claims report

E-commerce giant Flipkart is gearing up for a significant restructuring initiative as part of its strategy to streamline resources and sustain profitability, as reported by Times of India. The move could lead to the elimination of approximately 1,500 jobs, excluding those at its fashion platform Myntra, in the coming months.

This restructuring effort aligns with Flipkart's historical approach, where it has implemented similar workforce adjustments over the past two appraisal cycles. The company, owned by Walmart, has proactively frozen fresh hiring over the last year to control costs and safeguard profits.

To support its cost-control measures, Flipkart is reportedly finalizing a $1 billion financing round from Walmart and other investors. The infusion of funds is expected to fortify the company's financial position amid the ongoing restructuring.

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Resource optimisation strategies

Sources indicate that Flipkart aims to optimise its resources across both existing and new business verticals. A crucial meeting of senior executives is scheduled for the next month to deliberate on the proposed restructuring plan for 2024, which is likely to result in decisions regarding layoffs.

Despite the restructuring efforts, Flipkart remains committed to its plans for an initial public offering (IPO) in 2024. The company had initially considered launching the IPO in 2022-2023 but had to defer due to financial considerations. However, the restructuring does not alter Flipkart's IPO trajectory.

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While focusing on internal restructuring, Flipkart is set on diversifying its business operations. Following the acquisition of Cleartrip, the company aims to expand into sectors like hospitality and hotels, indicating a strategic move to navigate challenges and explore new avenues.

The restructuring trend is not unique to Flipkart, as several prominent IT firms and startups in India grapple with the global economic slowdown. Companies like Paytm, Amazon, and Meesho have also resorted to layoffs and departmental restructuring to adapt to the current economic landscape.

(With inputs from agencies)