Online retailer and the new entrant to the marketplace model Flipkart has fired numerous employees across locations in India as per various sources. E-tailer is looking to consolidate its office to Bangalore and has let go multiple employees in Delhi, Kolkata and Mumbai as well.
Sources close to this development told us that the employees were not even informed prior firing, they were asked to leave the office in five minutes and were told that this is management’s decision. “Management had no answers for the firing, we were told its a higher levels decision, we can’t do anything against this firing, ” said one of the fired employee. People were even informed that the employees are fired because they were not fit for the organisation. Though Flipkart is providing salary for one month to the fired employees in advance.
On contacting Flipkart regarding the same, we were informed that no one has been fired and its a rumour. Though, iamwire received an anonymous email few days back, stating that Flipkart is firing 1000 people in one go, Flipkart’s spokesperson has constantly denied the activity.
Last year there was excess hiring in Flipkart, as Flipkart was working to add on new categories, in past one year it had added various new categories including apparel, Baby care & toys, Flyte, etc. and has also launched a marketplace
Is Flipkart trying to downscale books category?
Books is the first category where this sort of firing was seen. Usually one month notice is been given and employees are asked for options, either to resign or give notice of one month or shift to other department.
Seems Flipkart, which entered in the ecommerce business with the books category, is now trying to cut short the operations in it. Sources told us that Flipkart may scrap its books category, as out of 200 odd list of vendors, Flipkart will stop working with around 150 vendors, thus it has to cut the team managing books category, to reduce its operational cost.
Shifting office to centralised location, a step to reduce operational cost?
As Flipkart’s top management operates from Bangalore, so consolidating office to Bangalore can be considered as a step to reduce operational costs for the company. Though it will continue to operate warehouses at all existing locations.
In this volatile market times, reducing operational cost has become the no.1 objective of companies to keep the expenditure minimum.
Recently, Sachin Bansal, CEO, Flipkart also shared that Flipkart will be raising a fresh round of funding before going public which come after 2-5 years. Cost-cutting by reducing team size and consolidating offices seems the company’s way of taking business towards profitability. Also the recent introduction of the marketplace model will cut down costs on employees working at the backend. In the most recent funding round, Flipkart had raised $150 million from South African media group Nasper and California based Iconiq capital, Tiger Global and Accel Partners.