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In a statement sent to us, Flipkart has explained, that this is more of a paerformance based ‘letting-go’ of employees rather than lay-offs. Nevertheless, employees — and close to the number originally quoted by us — have left the company. Here’s Flipkart detailed note on the same :

As a performance oriented organisation, we have a transparent evaluation process in place. Employees are assessed in a fair, simple, transparent and development oriented manner. We use our review process to differentiate performance and maintain a high bar, which is reflected in our total rewards philosophy. The top performers are rewarded highly and promoted to the next growth level. The solid performers are accordingly recognized 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 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 can be better utilized. This is a fairly common practice across various industries- especially in high performing internet organizations.


Flipkart is getting serious towards achieving profitability, get better cashflows, and become leaner in its entire structure. he result ? Lay-offs, and mass lay-offs to be specific. And to get even more specific on those numbers, it is close to 70-1000 people who are being let go, or being asked to resign.

According to reports coming out of multiple sources, India’s erstwhile startup ecosystem poster boy has let go off employees, as it looks to clean-up the company and make it leaner. Moreover, the ecommerce giant is letting off these employees largely on the basis of their performances. Flipkart is offering two options to the employees who have “failed to meet professional expectations” –  resign or be sent off with severance pay. The company wasn’t immediately available to comment.

The company — to update your GK skills — has a whopping 30,000 plus strong workforce. Thus via simple arithmetic, the current lay-off of 700 to 1000 people affects 2.3 to 3.3 percent of the workforce. The number may sound minimal, but the effects and the sentiment for Flipkart post lay-off within the community may take a big hit.

Flipkart, like most other Indian startups of those days, have been continuously receiving massive cash backing to fuel operations, expand at an alarmingly high rate and hence burn more cash. Now as funding becomes scarce, and questions arise on business models (considering Flipkart has now been around for close to a decade, without turning profitable), lay-offs, top management exits and internal problems are a common in these brands. With such moves, Flipkart is trying to save cost, lower down its burn rate and somehow achieve profits.

Earlier this year, Flipkart was criticized when it deferred the joining dates for the applicants to who hired through campus placements at IIM. However, the company said that “this is a fairly common practice across various industries- especially in high performing internet organisations.”

Apart from laying-off employees, the company is also struggling to retain senior-level talent which the company was able to attract earlier, largely due to the euphoria surrounding the Indian startup ecosystem and massive funding in various companies. For Flipkart, many executives have left company for various reasons. But, the new management under Binny Bansal claims to be changing things to maintain market leadership.

Flipkart, which though continues to be a market leader in the eCommerce segment, is currently struggling to raise a new funding round on its terms. The company had a series of valuation markdowns, which lowered the company’s valuation. Even though, the company wants to raise funding at its previous valuation, i.e. $15.2 billion.

As for competition, Flipkart continues to get a fierce competition from Amazon — a company which has promised to infuse billions into its India business. India is an important territory for Amazon, largely so as it failed to set foot in China. The company has already confirmed close to $5 Billion in investments for India units. Oh and wait, these quarter earnings pretty much show how much more Amazon can go on and invest.

On the other hand, Flipkart’s co-founder and chairperson, Sachin Bansal, is looking to “make history” with the acquisition of fashion portal Jabong for $70 million. Snapdeal was also said to be in the race to acquire Jabong but that didn’t work out.

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