Major e-commerce company Flipkart is expected to terminate 1,000 workers by the end of March, accounting for almost 5% of its workforce, as part of its performance-based appraisal cycle.
“As assessments are being conducted, the figures are presently speculative. Certain individuals may be asked to leave based on how well their teams and categories perform. The same was discussed with staff members during an internal town hall on Thursday, according to company sources.
At the town hall, Flipkart CEO Kalyan Krishnamurthy stated that the company’s cash burn has reached its lowest point in the previous eight years and that the company’s financial situation is improving. Flipkart’s United Payments Interface (UPI) rollout to 10,000 customers has been announced by Krishnamurthy, and it will soon expand throughout all of India.
“Flipkart Travels is approaching profitability and is performing incredibly well. We’ll be putting a lot of effort into adding more hotels to the platform this year,” he stated at the town hall. The travel technology platform Claertrip, which Flipkart purchased in 2021, is a part of the company’s travel operations.
Any layoffs brought on by the performance review will take effect in April. The organization had previously implemented comparable performance-based workforce reductions. With these layoffs, Flipkart becomes one of the tech companies that issued pink slips at the beginning of the year.
Due to a general increase across all of its segments, especially its largest one, logistics, which increased by 50% annually, the company was able to slightly reduce its losses in the most recent fiscal year. Flipkart Internet, the company’s marketplace division, reported a loss of Rs 4,027 crore in FY23, a little less than the Rs 4,420 crore it had reported the year before.
Revenue increased 42% year over year to Rs 14,846 crore, helped by a broad-based growth across its segment, despite a 26% increase in expenses. Walmart, the company’s largest shareholder, recently contributed $600 million to the business as part of its $1 billion fund-raising plan. The remaining $400 million is anticipated to be contributed by a few external investors and additional internal stakeholders.
The funds will be utilized to improve its technological prowess, fortify its supply chain, and grow its operations. This is not a pre-IPO round, though, and a new fundraising attempt is anticipated for the following year. Earlier, Flipkart’s parent company Walmart had stated that the company’s IPO is still a “long-term ambition.” Flipkart was last valued at approximately $35 billion, but according to sources, the most recent round may value it at a premium of roughly 5–10%.
With a $16 billion purchase in May 2018, Walmart had reduced its 77% stake in Flipkart to 75%. Walmart acquired the remaining shares in Flipkart from some of the original investors, including Accel, Tiger Global Management, and co-founder Binny Bansal, in July, bringing Walmart’s ownership in the e-commerce company to 80%.
