 "Flipkart gives 100% bonus to employees and merit-linked payouts")
Amidst a downturn in the technology sector, Flipkart is giving 100 per cent bonus to all employees and rolling out merit-linked payouts to eligible staff. The Walmart-owned e-commerce firm is rolling out this initiative for most of the total workforce of about 22,000 based on their eligibility.
"On behalf of the Management Team, I am pleased to announce that we have decided to keep the 2023 company multiplier at 100 per cent for all employees (including vice presidents and senior vice presidents). This is to recognise the quality of performance and effort by all of you," said Flipkart Group Chief Executive Officer Kalyan Krishnamurthy in a letter addressed to the employees and a copy of which 'Business Standard' has seen.
A source said that all employees would get the bonus with March salary. “Also, this bonus varies based on the compensation package and performance of the staff.”
The person said that this is an annual exercise. What differentiates it is that the number of employees receiving increments this year will be higher than last year. However, it is not known the total amount that Flipkart is disbursing this year.
Industry sources said that Flipkart rolling out the bonus and merit-linked payout reflects the strong growth that the e-commerce firm is witnessing.
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In the letter, Krishnamurthy said that 2023 has been a strong year for Flipkart. It scaled and launched categories and products for the customers and continued to innovate in its pursuit of empowering every Indian consumer.
"In 2024, we look forward to identifying and taking on new opportunities with even more zest and agility, with the intention of creating the most positive impact on the ecosystem," said Krishnamurthy. "We have made strategic investments while managing costs, and the management team and I are grateful for your contributions and support."
Flipkart confirmed that it is giving 100 per cent bonus to all employees and merit-linked payouts to eligible staff. "At Flipkart, we have always prioritized what’s right for both our employees and organization at large, and this compensation review cycle is in line with this intention. We are providing compensation increases to employees getting promoted, merit linked payments and bonus payouts. Additionally, our stock option allocation exercise will continue as is, for those who are eligible," said the company.
As the company has completed the compensation review cycle, Krishnamurthy assured the employees that the firm has always prioritized them. "Despite contrary industry trends, we are exploring options and reward structures that are beneficial to you in every possible way," he said.
Regarding the 'performance bonus company multiplier', Krishnamurthy said that the company multiplier for the bonus payout is typically arrived at by measuring the company’s performance against key business parameters. These include GMV (gross merchandise value), contribution margin, net promoter score, EBITDA (earnings before interest, taxes, depreciation, and amortization) and people metrics (attrition and inclusion and diversity).
Regarding merit-linked payouts, Krishnamurthy said the firm listened to the employee feedback. To balance their needs and organisational priorities, the firm has decided to make a one-time change to its merit approach this year. Instead of usual compensation increases, the firm will be delivering merit-linked payouts to all eligible employees in Grade 12 and below. These merit-linked payouts shall be made as two lump sum payments in April and October this year. They are equivalent in value to the merit increase that would have typically been paid through the year.
"Employees who are being promoted will receive increments as usual, across grades," said Krishnamurthy. "For the rest of the grades, we have enabled the wider spread of ESOP (employees stock ownership plan) allocation in line with our philosophy to drive wealth creation."
Krishnamurthy said the company’s total rewards philosophy has always emphasized providing opportunities to employees that will enable, enrich and empower them. "This concept goes beyond the construct of increment to include all levers of rewards, including performance bonuses, aggressive stock options, industry-leading benefits and insurance. We also continue to partner with more brands to provide more value to you as employees. I want to thank each one of you once again, for your contributions because that continues to make a difference in everything we have achieved as business," he said.
Walmart International’s sales growth during the fourth quarter was led by India's Flipkart, Mexico's Walmex, and China with a strong performance during festive events across markets, according to an earnings report of the US company. This included Flipkart’s largest-ever BBD event with 1.4 billion customer visits during the eight-day period. Walmart International’s net sales increased to $32.4 billion in Q4 compared to $27.6 billion a year ago.
Flipkart Internet, the marketplace arm of the e-commerce giant, recently reported a 42 per cent growth in operating revenue for FY23 at Rs 14,845 crore. Its total loss declined by 9 per cent to Rs 4,026 crore, according to data accessed by business intelligence platform Tofler. Total expenses grew by 26 per cent to Rs 19,043 crore in FY23. Employee benefit expense was Rs 4,482 crore, an increase from Rs 3,735 crore in the previous period. The firm spent Rs 6,571 crore on logistics in FY23, a 30 per cent increase compared to the previous period. Advertising and promotional expenses increased to Rs 2,407 crore from Rs 1,945 crore. The Bengaluru-based firm had made Rs 10,477 crore in operating revenue in FY22 and witnessed a total loss of Rs 4,419 crore.