Flipkart plans 5-7% workforce cut, performance-based layoffs in March: Report

PTC News Desk: In a strategic move aimed at optimising resources and bolstering profitability, e-commerce giant Flipkart is reportedly planning to undertake significant restructuring, resulting in the potential reduction of 5-7 per cent of its workforce. According to sources, the restructuring initiative will be accompanied by performance-based job cuts during the annual appraisal cycle, scheduled for March-April 2024.

The Times of India reports that Flipkart, excluding its fashion subsidiary Myntra, currently employs over 22,000 individuals. The upcoming job cuts, targeted at streamlining operations and enhancing efficiency, could potentially affect as many as 1,500 positions within the company.

This restructuring plan comes as part of Flipkart's ongoing efforts to control costs and maintain profits. The company has refrained from fresh hiring over the past year, indicating a cautious approach to resource allocation. Additionally, Flipkart is reportedly in the process of finalizing a $1 billion financing round from investors, including Walmart.

Flipkart's strategic focus on resource optimisation extends to both its established and emerging ventures. To discuss and finalize the restructuring plan for 2024, a meeting of senior executives is scheduled for the upcoming month. The outcome of this meeting is expected to determine the specific areas and departments where the layoffs will occur.

This move aligns with Flipkart's commitment to adapt and evolve in the dynamic e-commerce landscape, ensuring long-term sustainability and competitiveness. As the company navigates these changes, the workforce reduction is anticipated to be a key element in achieving operational efficiency and maintaining a robust financial position.

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Flipkart forges ahead with IPO plans despite restructuring initiatives

As Flipkart charts a course through restructuring endeavors to navigate the challenges in the ever-evolving business landscape, sources indicate that the Walmart-owned company remains steadfast in its commitment to launch its Initial Public Offering (IPO) in 2024. Despite the ongoing efforts to streamline operations and enhance efficiency, Flipkart has no intention of reconsidering its IPO plans, according to reports from The Times of India.

Originally contemplating an IPO launch between 2022-2023, Flipkart had to defer these plans due to financial considerations. The company's current restructuring projects are part of a broader strategy to optimize resources and ensure long-term sustainability. Notably, the recent acquisition of Cleartrip has positioned Flipkart to expand its footprint into new sectors, particularly in the hospitality and hotel industries.

While Flipkart steers through these changes, it is noteworthy that several prominent IT firms and startups in India are also grappling with the economic slowdown by implementing job cuts across various departments. Recent instances include Paytm laying off 1000 employees, and both Amazon and SoftBank-owned Meesho undergoing job cuts and departmental restructuring.

In the face of these industry-wide challenges, Flipkart's decision to proceed with its IPO plans underscores its confidence in the future trajectory of the business. The company's expansion into diverse sectors post-acquisition, coupled with ongoing restructuring initiatives, reflects a strategic approach to position Flipkart for sustained growth in the dynamic and competitive market.

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