GoJavas appears to be in serious trouble. The temporary shutdown that was reported earlier this week looks to be escalating to something a lot bigger. Rumours regarding letting go of employees en masse are doing the rounds. GoJavas has had only two primary clients – Snapdeal and Jabong.
Originally a part of Jabong, Snapdeal bought a majority stake in GoJavas in 2015 and invested about Rs. 237 crores. The ecommerce major was seriously considering purchasing the logistics company outright, but things did not work, and GoJavas wanted to buy back Snapdeal’s 42% stake. Subsequently Snapdeal moved its logistics needs to Vulcan, its in-house transport wing.
Flipkart recently bought Jabong, making things worse for GoJavas. All this seems to have worked against the logistics company’s favour, which has led to the present situation.
According to reliable sources, the company has put around 1,500 employees on a 15-day notice period. All employees are part of the delivery hubs. According to a person familiar with the situation citing anonymity,
“Essentially, they were handling about 10% of their usual volumes which prompted the management to resort to lay-offs. Last week, they gave notice to the entire last-mile staff, essentially delivery personnel and hub in-charges. They are not getting into delivery again.”
The senior management has not been spared either, says the person.
All this indicates serious concerns within the logistics company. The following statement issued by a GoJavas spokesperson (on the technical changes and temporary suspension of activities) only corroborates our worst fears,
“It is difficult to confirm the exact time of the roll-out as thorough load testing is taking place internally. Till such time as that is completed, we are not serving any client.”
All leading ecommerce companies are slowly reducing their dependency on third party courier services and creating their own logistics departments. Some like Flipkart are even trying to make money by offering their logistics services to others. This being the case, standalone logistics companies will be seriously affected.
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