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E-commerce major Flipkart has announced that there would be no increments to senior leadership, impacting 30 per cent of its workforce or about 4,500 employees. The company has attributed this policy change to current macroeconomic conditions.
“At Flipkart, we have always attempted to balance employee and organisation priorities, with our actions being driven by what’s right for our people. Given the current macroeconomic situation, we want to be prudent in managing our resources while keeping our employees’ best interests in mind,” a company spokesperson told businessline.
Flipkart has sharpened it focus on profitability in the ongoing funding winter that has already pushed many tech companies to cut costs and layoff employees.
However, about 70 per cent of Flipkart’s employee base is eligible for pay hike. Additionally, company’s stock option allocation and bonus exercise will continue for the eligible employees.
“We stay committed to enhancing value for all our employees through employee-centric policies, continued skilling and training programs, regular promotion cycles, wealth creation for ESOP holders, and enhanced benefits, including medical insurance,” the spokesperson added.
Also read: Flipkart Wholesale experimenting with dark stores, hub and spoke model
This development comes close after Walmart’s Q4 earnings call where CFO John David Rainey said the global retail giant is pleased to see Flipkart’s positive contribution margin expanding.
“Any e-commerce or digital platform needs infrastructure that you can scale at a low marginal cost. And that’s what Flipkart has done. They’ve invested in that infrastructure over the last three years, so now we are able to see that contribution profit continue to expand. So, we’re excited about that,” Rainey added.
Flipkart Internet, Flipkart’s marketplace arm, reported that its loss widened 51 per cent to ₹4,362 crore in FY22. Whereas, Flipkart Wholsale (Flipkart India Private Limited) clocked a net loss of ₹3,404 crore during the same period.
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