The employee consolidation at Reliance Retail’s JioMart division may not affect the larger operations at the company, informed sources have told FE. Media reports on Tuesday had said that the JioMart division, which has around 15,000 people, was shedding some 1,000 jobs, as part of a larger restructuring exercise. A mail sent to Reliance Retail on the issue elicited no response till the time of going to the press.
However, at 15,000 people, the JioMart division, according to industry sources, constitutes around 3.75% of Reliance Retail’s total employee base of around 4 lakh. The company has also begun integrating India operations of Metro Cash & Carry into its JioMart division, resulting in paring of its workforce there to avoid duplication of roles. Reliance Retail had recently closed the `2,850-crore acquisition of Metro Cash and Carry, which was first announced in December last year.
Industry sources say that some employees in the JioMart division have also been put on contract as part of their annual performance appraisal process. They have described this as a routine exercise.
Reliance Retail had said earlier that the acquisition of Metro Cash & Carry would help strengthen its operations in the B2B segment. Apart from JioMart, which is an online platform, Reliance Retail’s also has offline cash and carry operations under Reliance Market, which is expected to get a fillip with the acquisition, industry experts said.
Metro Cash & Carry, an organised wholesaler, first entered India in 2003 and currently operates 31 wholesale distribution centres across the country.
When announcing the acquisition in December, Reliance Retail had said that it would be able to utilise Metro’s wholesale stores in cities such as Amritsar, Ahmedabad, Bengaluru, Delhi, Ghaziabad, Guntur, Hyderabad, Hubballi, Indore, Lucknow, Kolkata, Mumbai, Nasik, Surat, Visakhapatnam, and Vijayawada to feed its growing base of customers across the country.
Reliance Retail, according to industry experts, already has a 20% market share in the organised food and grocery business, with a store count nearly triple that of its nearest competitor ‘More’ in the segment.
JPMorgan had said in a recent report that Metro’s assets could further strengthen Reliance’s B2B offering in the grocery and general merchandise space.
“As per Reliance, the acquisition would give it the access to a large base of registered kiranas and other institutional customers, and strong supplier network among others. Over the years, Reliance Retail has focused on the large kirana store ecosystem in India and the acquisition of Metro’s wholesale business is a positive,” JPMorgan said.