The decision is learnt to have been taken following a lack of growth in Jabong's business during the last two quarters
Online fashion retailer Jabong has decided to lay off about 200-250 personnel in a massive retrenchment exercise following the exit of Binny Bansal, sources told Moneycontrol. In a townhall that lasted about 10 minutes on Friday, Myntra and Jabong chief Ananth Narayanan told employees that letters pertaining to the layoffs will be given shortly.
Narayanan put in his papers Thursday night, according to one of the sources. Even CFO Dipanjan Basu is learnt to have resigned. Official confirmation is yet to come. While the company says "Ananth Narayanan continues to lead the team", sources told Moneycontrol: "Narayanan has negotiated his exit and will remain with the company for another 3-6 months to complete the transition."
However, Myntra-Jabong chief on November 16 denied media reports that he will quit after a reshuffle in the ranks following the ouster of group CEO Binny Bansal. "I'm very excited about Myntra," Ananth Narayanan, the CEO of the business, told Reuters in an interview, adding that he "certainly intend to continue."
Sources said the company has shared a list of employees asked to leave with team heads and individual letters will be given soon.
Executives with designations of deputy general manager and above have been informed verbally about the decision, a source said. Moneycontrol first reported about the layoffs earlier in the day.
"...Myntra and Jabong will now fully integrate all the remaining functions including technology, marketing, category, revenue, finance and creative teams. The closer integration of Myntra and Jabong is a necessary step in our continuing development. To remain the leader in fashion eCommerce in India, we have to find ways to operate more effectively and innovate more quickly. By better aligning our resources with our long-term plans, we can put the best structure in place to serve our sellers and brand partners and ultimately benefit our customers,” a company spokesperson said.
The decision is learnt to have been taken following a lack of growth in Jabong's business during the last two quarters. It has been decided that the operations will now be consolidated in Bengaluru.
A list of people who will be fired and those who will be transferred have been shared with the respective teams, sources said. The employees who don't get the option to join in Bengaluru will be offered three months' pay as severance and 15 days of pay for every year served, besides gratuity.
Flipkart owns three fashion brands under its umbrella — Flipkart Fashion, Myntra and Jabong. Myntra and Jabong together have been asked to move all operations to Bengaluru and cut workforce. There is no clarity on what happens to the Jabong brand after this consolidation exercise.
On the cost front, it wouldn't make sense for Walmart — which acquired Flipkart earlier this year — to keep pumping cash into three different brands.
On Thursday, Moneycontrol reported that after Bansal's exit, a rejig at Flipkart Group was imminent, because of which many senior leaders including Ananth Narayanan, CEO of Myntra and Jabong, could leave the company.
While Myntra and Flipkart didn't immediately respond to emails sent on the mass retrenchment development, in an email on Thursday a Flipkart spokesperson had said: "We are excited with the progress we are making at Myntra and Jabong and their business growth. The teams are well focused on bringing the best selection for consumers, and executing the existing strategy.""As previously announced, Kalyan will continue to serve as CEO of Flipkart, while Ananth will continue providing great leadership as CEO of Myntra /Jabong. He will report into Kalyan and the companies will still operate as independent platforms under the Flipkart group."