A screen grab of the Jabong website.
In a final move to consolidate Jabong potentially as a sub-brand under Myntra, the designations of about 400 employees including Kalyan Kumar - the chief buying officer - are being reduced by at least one level as the company goes through a massive restructuring exercise, according to two people familiar with the matter.
Rahul Taneja, the chief business officer has already exited the company, leaving Kumar as one of the few CXOs in Jabong. Taneja was with the company until January 31st.
Kumar who had the rank of a senior vice president (SVP) has now been redesignated as the vice president. Similarly, the vice president level executives will be degraded to the assistant vice president level and so on.
The same was communicated to the employees last week by Myntra's head of HR Manpreet Ratia, however, the teams got the emails only on Wednesday.
"As a step towards creating a robust team structure across Myntra and Jabong and ensuring that the employee experience is consistent throughout, we have relooked at our present Job Levels at Jabong and evaluated them across benchmarks to create a common understanding of Grades and Competencies across," said the email sent to the employees.
Moneycontrol has seen a copy of the letter.
Kumar who had the rank of a senior vice president will now be redesignated as the vice president. Similarly, the vice president level executives will be degraded to the assistant vice president level and so on.
The current level for the SVP rank within the company is 11 with an equivalent grade of M9. The same will now be 10 and M8, respectively.
“Post this there will not be any senior vice president in the company,” said one of the sources quoted above adding that it is possible that a couple of senior directors remain untouched by this exercise. The names have not been communicated as of now.
“There is a promotion cycle coming in March. So for some people post this downgrade, there might be a promotion. So practically that would mean that you continue to hold the position you were holding earlier. But those are going to be a few set of exceptions and will not be for SVP or VP level executives,” the person added.
It wasn’t immediately clear if the same will have any effect on the salaries of the employees.
“It is unlikely given that now the salaries are being mapped according to Myntra’s standards,” said the second source adding that currently, the senior most person is the company would be getting a sub Rs 1 crore salary.
Moneycontrol was the first to report about the fresh round of rejigging happening in the company.
Before Taneja, the chief financial officer Vinod Abrol who was in Jabong since 2013 had left the firm. His team that consisted of about 40 people is now reporting to Rohin Vig, the finance controller of Myntra.
Every department head has been communicated about the proposed designations of their respective executives and the same will come into effect, shortly.
"The job evaluation was conducted through established scientific approaches. AON Hewitt job evaluation framework was used for this exercise," the letter further said adding that the changes are based on the competency framework and the scope of work for an individual, among other things.
It also said that this will not have any impact on the individual's performance rating or promotion recommendations during the upcoming year-end cycle.
"We have increased compensation, given stock and made policies equal. These have not been done to demote anyone," Myntra spokesperson said in an email.
However there was no immediate clarity on how or to what effect the compensations have been increased.
It is expected that Jabong will now be presented as a premium brand focusing on merchandise upwards of Rs 2,500 while Myntra will concentrate mostly in the mass premium category. This will cover products in Rs 1,000-Rs 2,500 range.
Myntra acquired Jabong in a discount deal of USD 70 million. Since then, the industry has been speculating about parent firm Flipkart’s decision to run two separate fashion portals, especially when Flipkart also has a fashion arm of its own.
Time and again, the company has reiterated that there is just about 30 percent customer overlap between Myntra and Jabong.
Last year Gunjan Soni, head of Jabong told Moneycontrol
in an interaction that Jabong was consolidating the warehouse space across India with Myntra. Thus instead of five warehouses, the plan was to have only four.