According to a report by ET, Flipkart, a major player in e-commerce, is currently trimming its workforce in a bid to enhance profitability. Multiple sources familiar with the matter have disclosed that at least four senior vice presidents (SVPs) will be departing, adding to the list of CXO-level exits at the company.
Ayyappan R, head of travel booking website Cleartrip, along with Amitesh Jha, who oversees marketplace and categories, Dheeraj A, in charge of fintech and payments, and Bharath Ram, leading growth and retention at the web retailer, are reportedly among the SVPs expected to depart. Jha has been with Flipkart since 2010, while Ayyappan has been a part of the etailer since 2013, making them among the executives with the longest tenure at the Bengaluru-based firm, as reported.
The development assumes importance against the backdrop of Flipkart group CEO Kalyan Krishnamurthy‘s campaign to strengthen agility and efficiency.
“Krishnamurthy wants to send a message by tightening the ship,” said one of the people cited above. “Many are comparing this to the 2016 era when he came back to Flipkart for a second innings. Amazon at the time was snapping at his heels and the company went through its toughest few years then. One of the key areas the company wants to address is Flipkart’s bloated, top-heavy structure and bring in agility.”
Dheeraj A transitioned to Flipkart from Mobikwik in October 2021, whereas Ram joined from Instagram in March 2020.
Insiders familiar with the situation revealed that Flipkart collaborated with a leading consulting firm to streamline its organizational structure across various levels, with the outcomes currently being put into action.
According to people briefed on the matter, Flipkart is also filling some of the positions left vacant by departing executives. Meanwhile, Sandeep Karwa, formerly the vice president heading the fashion vertical, has moved to the advertisement vertical. Flipkart Fashion is now headed by Arief Mohamad.
The move comes at a time when Flipkart has initiated performance-based trimming across all verticals, including vice presidents in engineering and product, as reported by individuals familiar with the matter. Overall, the layoffs will impact approximately 5-7% of the company’s employees.
Continue Exploring: Walmart-owned Flipkart initiates annual job cuts, targets 5-7% workforce reduction by April
“The mandate is clear– perform and become nimble as a company,” said another person familiar with the developments. “While, over the years, Flipkart would see 5-7% employees leave as part of its performance-linked (reviews), these were largely at the junior level… What has changed this year is senior and CXO-level exits as long-time, senior executives have come under pressure.”
According to another source, the majority of departures are tied to performance, although a few executives have chosen to leave voluntarily.
“What’s important to note is that a bunch of these (people) were at the company for over a decade across various functions,” the person said.
A spokesperson from Flipkart stated that the company boasts a robust and diverse leadership pool, comprising numerous skilled executives who have served in various capacities within the organization.
“With a stable and strong leadership team, we provide our executives with different roles and responsibilities to meet their personal aspirations and also develop well-rounded experience. We will be unable to comment on our internal operations and specifics,” the spokesperson added.
According to sources familiar with the matter, the Senior Vice President (SVP) cohort, consisting of approximately 20 executives, has experienced consistent turnover over the past year or so, with nearly 30% of leaders departing for various reasons.
“From a pool of 23 SVPs, at its peak, around 30% have left over the last one year or so, including Adarsh Menon, Ravish Sinha, Saroj Panigrahy and most recently Krishna Raghavan in October last year… among others,” said one of the persons.
As Flipkart gears up for a new phase of growth, marked by talks of securing fresh funding to the tune of $1 billion, the e-commerce giant is concurrently implementing belt-tightening measures. Out of this anticipated investment, $600 million has already been committed by its US parent Walmart. Notably, a significant portion of these funds is earmarked to fuel endeavors in financial services post the separation of PhonePe.
Flipkart is in the final stages of testing its Unified Payments Interface (UPI) payment service, set to go live early next month on its platform. Additionally, Flipkart has backed senior executive Prakash Sikaria’s fintech venture Super.money after he abandoned plans to leave the company and incubated the venture internally.
During a town hall meeting last month, Krishnamurthy informed employees that Flipkart is nearing profitability by reducing its monthly cash burn. He emphasized the company’s commitment to expanding its grocery services and travel business through Cleartrip.
Continue Exploring: Flipkart nears profitability amidst cost reduction measures and fintech expansion
Reports suggest that Cleartrip has achieved a gross merchandise value ranging between $1.5 billion to $1.7 billion. During the town hall, Krishnamurthy highlighted the grocery business’s impressive growth of 50% over the past year. Additionally, Flipkart intends to further expand its low-price focused commerce vertical, Shopsy, alongside core businesses including smartphones, electronics & appliances, and fashion. Notably, the company recently unveiled same-day delivery options for select products across 20 cities in India.
According to regulatory filings, Flipkart Internet, the entity managing the marketplace, recorded a 42% increase in operating revenue for FY23, reaching INR 14,845 crore, while its total loss decreased by 9% to INR 4,026 crore. Additionally, in January, Flipkart co-founder Binny Bansal departed from the board, officially ending his ties with the ecommerce firm.
Continue Exploring: Flipkart revives same-day delivery service across 20 cities, taking on Amazon’s Prime model
