E-commerce major Flipkart is likely to let go of 1,000 employees, or nearly 5% of its workforce, as a part of its performance-based appraisal cycle which is expected by the end of March.
“The numbers are currently speculative as appraisals are going on. Based on the performance of teams and categories, some people might be asked to leave. Employees were informed of the same in a townhall held internally on Thursday,” company sources said.
Flipkart CEO Kalyan Krishnamurthy held the townhall during which he said that the company’s financial health is improving and cash burn has hit the lowest in the last eight years. Krishnamurthy also annouced that Flipkart’s United Payments Interface (UPI) has been rolled out to 10,000 customers so far and will be scaled pan-India soon.
“Flipkart Travels is doing really well and getting closer to profitability. This year we will focus a lot on adding more hotels on the platform,” he said at the townhall. Flipkart’s travel business includes travel-tech platform Claertrip, which the company had acquired in 2021.
Any job cuts resulting from the performance review will be effective from April. The company had carried out similar performance-based job cuts in the past as well. With these layoffs, Flipkart joins a list of tech-based companies, which have handed out pink slips at the start of the year.
In the last financial year, the company was able to slightly cut down its losses due to a broad-based growth across segments, particularly its largest segment – logistics – that grew 50% on year. The company’s marketplace arm – Flipkart Internet – posted a loss of Rs 4,027 crore in FY23, slightly lower than the Rs 4,420 crore it had posted in the preceding year.
Even as expenses jumped 26%, a broad-based growth across its segment aided revenue growth, which rose 42% year-on-year to Rs 14,846 crore. The company recently received an investment of $600 million from its largest shareholder Walmart, as part of its $1 billion fund raise plan. Other internal stakeholders and a few external investors are expected to put in the balance $400 million.
The money will be used to expand its operations, strengthen its supply chain and bolster its tech capabilities. However, this is not a pre-IPO round and another fundraise can be expected next year. Its parent Walmart had earlier noted that Flipkart’s IPO remains a “long-term ambition” for the company. Flipkart was last valued at around $35 billion, while the latest round may value it at a premium of around 5-10%, as per sources.
Walmart had acquired 77% stake in Flipkart in for $16 billion in May 2018 and later reduced it to 75%. Walmart’s stake in Flipkart crossed the 80% mark in July when the company bought the residual stake from some of the early investors – Tiger Global Management, Accel, and co-founder, Binny Bansal — in the e-commerce firm.