Accusations & speculations fly as Flipkart fires 700 employees; etailer in financial trouble?

Editor | Sep 09, 2020

Ecommerce biggie Flipkart is on a firing spree. The etailer has given pink slip to nearly 700 of its employees and is likely to fire a few hundred more.

Non-performing employees fired

A company spokesperson revealed that employees who failed to meet the performance standard set by the firm are being encouraged to find other job opportunities.

“We use our review process to differentiate performance and maintain a high bar, which is reflected in our total-rewards philosophy… At times, we have employees who do not meet the performance bar. In those situations, we work closely with employees to enable them to improve their performance. In due course, if these employees are unable to make the desired progress, they are encouraged to seek opportunities outside the company where their skills are better utilised,” said the official representative of Flipkart.

Fund crunch the main reason behind downsizing staff?

The online marketplace maintains that poor performance is the only reason why 700 staff members were fired. But the employees have different story to tell.

Many employees (now ex) have disclosed that Flipkart deliberately sets unrealistic targets so that they are forced to leave.

One employee said, “It was impossible to meet those new parameters. The irony is, we had great appraisals a few months ago.”

Another one shared, “This (unrealistic targets) created immense pressure. You eventually end up resigning. That saves the management the trouble of calling it a layoff.”

Why? Fund crunch, many believe.

Flipkart’s fling with ‘slash’

The words ‘slash’, ‘cut down’, ‘delist’ made an appearance in Flipkart’s 2016 news board many times this year.

Its valuation was slashed down seven times (marked-up once) in the last 6 months.  Fund crunch forced the etailer to slash ad spends, discounts and employee increments. A month back Flipkart also started delisting unclaimed brands and sellers.

The only thing that went up was seller commission charges and sales & customer experience targets to reduce cash burn rate. And all this has led to vendors leaving the platform and employees being laid off.

Mass lay-offs by Indian startups

Experts believe that most Indian startups follow a hire-and-fire trend and it’s a sign of financial problem, poor management and immaturity. Companies hire employees during peak season and then lay-off employees on a whim.

In the recent times, Grofers, Snapdeal, Zomato, TinyOwl and Housing among many others have been in the news for firing 1000s of workers without any warning.

“Investors are breathing down the necks of startup founders, who have bright ideas but no experience when it comes to running a company and motivating people. Also, most startups don’t have high-profile HR leaders who can put their foot down and ask for more time for employees,” stated Kamal Karanth, MD at Kelly Services & KellyOCG, a staffing and recruiting firm.

Coming back to Flipkart, the ecommerce leader recently splurged $70 million on Jabong. One on hand, it is looking to bring down operational costs by passing on the burden to sellers and downsizing staff. On the other hand, the etailer willingly bought a debt-ridden company without a clean record. Where is Flipkart heading?

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Editor team is specialized in introducing the marketplace content targeting the Indian online sellers. They plan and coordinate to bring the appealing content for the small businesses on how to partner with the e-commerce sites like Amazon and Flipkart and strategies for improving their online business. 

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