Walmart-owned Flipkart will let go of 1,000 employees, which represents around 5 percent of its total workforce, as part of its annual performance review exercise, people aware of the developments told Moneycontrol.
The Bengaluru-based company had around 22,000 people on its payroll. The total strength does not include employees from e-commerce fashion portal Myntra.
The company did not immediately respond to Moneycontrol's queries.
To be sure, Flipkart undertakes these performance-based job cost cuts every year and the fresh reduction in workforce is along those lines, too.
Flipkart CEO Kalyan Krishnamurthy held a townhall with employees on January 25, during which he said that the company's financial health is improving. He added that Flipkart will be in much better shape by the end of the year. It is possible that Flipkart's IPO will be pushed to 2025 as the unit economics will be better, a person aware of the developments told Moneycontrol.
"Flipkart's Grocery business has shown a lot of positive momentum and is growing well," another person aware of the company's plans said.
"Kalyan also told us that Flipkart's mobile app business is starting to make money now and that the business is doing well."
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Flipkart UPI kicks off
The CEO also said that Flipkart's Unified Payments Interface (UPI) project has taken shape and is currently being tested out with a small set of users.
The e-commerce company having a UPI offering of its own strengthens its entire ecosystem. The idea is that customers, while shopping, use Flipkart's UPI and stay on the platform instead of having to switch between multiple apps to make payments.
For rival Amazon, UPI continues to be important as around 45 percent of all purchases made on Amazon are settled using Amazon Pay UPI, Moneycontrol had reported earlier.
To ensure Flipkart is well capitalised, its parent, Walmart -- the US-based retailer -- even infused $600 million, as reported by Moneycontrol last month. The fresh infusion was at a time when Flipkart's planned public market listing has been delayed. Flipkart was earlier eyeing a listing in 2022-23.
While $600 million would help Flipkart run operations until then, there will likely be another pre-IPO round later.
Meanwhile, Walmart has been backing Flipkart and has underscored that the company has the potential to be a $100 billion businesses. Flipkart’s flagship event, the Big Billion Day (BBD) sale, boosted Walmart’s financial performance, as reported in November 2023.
Analysts have also said Flipkart is growing stronger. "Flipkart
continues to grow faster than the industry. Mobile and apparel to be the largest categories for Flipkart with ~50% and 30% mix. Flipkart is estimated to hold 48% and 60% market share in online smartphone and online fashion market respectively," the analysts at Bernstein said.
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