 "Flipkart to reduce its workforce by 5-7% based on performance by April")
Flipkart, owned by Walmart, has commenced a workforce reduction initiative that could lead to a five to seven per cent decrease in its total team, according to a report by The Economic Times (ET). This move is part of the company's annual performance-based job reductions, which have been in effect for the past two years. The process is expected to be completed by March-April, coinciding with the ongoing performance reviews and the end of the ongoing financial year.
The e-commerce giant, with 22,000 employees (excluding Myntra), has been actively managing costs, including freezing fresh hiring over the past year. Currently, the company is also finalising a $1 billion financing round from Walmart and other investors, the ET report added.
The reduction in workforce also aligns with Flipkart's focus on better resource utilisation across its existing and new businesses. The company is set to discuss and finalise the restructuring plans and the roadmap for 2024 at an upcoming gathering of senior executives scheduled for next month.
Despite the workforce reduction, there appears to be no plans to reconsider the decision to postpone Flipkart's public offering until 2024. Flipkart had initially considered launching an IPO during 2022-23 but decided to put those plans on hold.
As reported earlier by Business Standard, Flipkart recorded a 42 per cent growth in operating revenue, reaching Rs 14,845 crore by the end of December for the ongoing financial year (FY23). According to data accessed by business intelligence platform Tofler, Flipkart's total loss declined by nine per cent to Rs 4,026 crore. Total expenses increased by 26 per cent to Rs 19,043 crore, with a significant portion allocated to logistics, employee benefits, and advertising expenses.