Layoffs are in line with industry practices: Flipkart

Our Bureau Bengaluru | Updated on January 18, 2018 Published on July 29, 2016

Says its review process differentiates performers

Indian e-commerce giant Flipkart, which has asked around 400 of its 33,000-strong workforce to leave the company on grounds of non-performance, said the move was in line with industry practices.

“We use our review process to differentiate performance and maintain a high bar, which is reflected in our total-rewards philosophy. Top performers are rewarded highly and promoted to the next growth-level. Solid performers are accordingly recognised and groomed for future roles through mentoring, coaching and on-the-job learning opportunities.

“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 a spokesperson.

Asked whether Flipkart would help outplace these employees in other organisations, as is the practice in many forward-looking organisations, including IT services organisations, the spokesperson said: “Not to my knowledge.”

Most analysts say layoffs are a way to reduce costs and a clear signal to employees that they must continue to improve on individual productivity rates in a fiercely competitive e-commerce environment.

Executing mass layoffs

Sanchit Vir Gogia, Chief Analyst and CEO of Greyhound Research, told BusinessLine: “Start-ups in India or the Silicon Valley do not have the internal capability or expertise to execute mass layoffs. Even large blue-chip organisations continue to struggle with such mass layoffs.”

Over the last few years, Flipkart has hired at a furious pace to match its rapid growth and face competition; now that the e-commerce market is facing flat GMV rates since the last 6-8 months, rationalisation of workforce is bound to happen and that’s what’s happening at Flipkart, said Anil Kumar, CEO of RedSeer Consulting. The layoffs at Flipkart are a result of the company’s focus on cutting costs and improving operational efficiencies, observed Harish HV, Partner, Grant Thornton.

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Published on July 29, 2016
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