After taking a restructuring exercise last week, Flipkart has decided to go slow on hiring new employees, Group CEO Kalyan Krishnamurthy told Moneycontrol in an exclusive interview.
“…if we need people in certain functions and capabilities, absolutely (we will hire). But outside of that, we will continue to go slow on hiring new employees,” Krishnamurthy said.
His comments come days after the Walmart-owned e-commerce giant let go of 1,000 employees as part of its performance review exercise which it undertakes every year, Moneycontrol reported on January 25.
The Bengaluru-based firm had around 22,000 people on its payroll, excluding employees from its fashion portal Myntra.
The restructuring process is expected to be completed by March-April.
The prolonged funding winter saw major startups handing out pink slips to their employees in 2023, as companies attempt to realign cost structures.
Among the latest to join the trail is IPO-bound Swiggy which is preparing to lay off 400 employees, after letting go of 380 employees in January last year.
Fintech major Paytm also laid off over 1,000 employees in December in order to improve efficiency, followed by Byju’s which fired the most number of employees at 3,500 in two rounds, Unacademy (12 percent of total employees), ShareChat (500), Ola (200) and Physics Walla (120) in the last 12 months.
Overall, the year 2023 witnessed a whopping 58 percent more layoffs across companies as compared to 2022.
The tailwinds are likely to continue in 2024.
January so far has seen over 20,000 being laid off from 85 tech companies, including the likes of SAP, Salesforce, Google and Amazon.
Flipkart’s plan of action
In a recent towhall held with employees on January 25, CEO Krishnamurthy pressed on improving the company’s financial health while continuing to double down on grocery along with newer segments like fintech (payments and lending), travel (Cleartrip), quick commerce, etc.
Among the latest bets, financial services has taken the spotlight as the e-commerce firm looks to launch its payment product within a month, Krishnamurthy confirmed during the interview.
He adds that the large financial play for the company is solely aimed at increasing user frequency and drive transaction velocity within the Flipkart universe, with no ambition to be a large payment or fintech company.
“The bigger opportunity there is what we are trying to do is frequency. We want people to keep coming back so that eventually they will do commerce. In my mind, payments and fintech, the word fintech is generally used quite loosely, is very different,” Krishnamurthy told Moneycontrol.
A latest report by AllianceBernstein placed Flipkart at the top of the e-commerce segment with 48 per cent market share, knocking out peers Meesho and Amazon.
Smartphones and fashion continue to be the core categories for Flipkart’s India business.
To fuel its ambitions, Flipkart claims to be well capitalised at present. Its parent, Walmart even infused $600 million in December, of the larger $1 billion funding round it prepares in the near future.
“We took an agenda that the company has to become more agile. The measure of that is the number of products that we have launched. We have moved mountain on that front,” said Krishnamurthy.
Majority of Flipkart’s new investments will be channelled towards new categories, strengthening supply chain, of which AI will play an important role, he said.
“Bulk of Flipkart’s investment goes towards futuristic bets where Flipkart might not yet be the automatic destination for the customer. All the categories where we are still building is a massive part of our investment budget,” said Krishnamurthy.
On an interesting note, the CEO mentioned that the firm has not invested in anything else (business/category) which has been in the company for more than 3 years.
Flipkart India Private Limited, the wholesale business arm of the e-commerce major, saw its revenues increase by just 9.4 percent to Rs 55,824 crore in FY23, while the losses widening 42 percent to Rs 4,846 crore.
Meanwhile, its other key vertical--Flipkart Internet Pvt Ltd—which provides services like payment gateway, technology, advertising and logistics management clocked a revenue of Rs 10,659 crore in FY22, while its net loss widened 51 percent to Rs 4,362 crore.
The company is yet to file its FY23 results.
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