Group CEO Kalyan Krishnamurthy of Flipkart told Moneycontrol in an exclusive interview that the company has opted to take its time employing new staff members following a reorganization process that was completed last week.
“…we will recruit people if necessary to fill certain roles and competencies. However, aside from that, we’ll keep recruiting new staff members slowly,” according to Krishnamurthy.
His remarks coincide with the e-commerce behemoth owned by Walmart, which laid off 1,000 workers as part of its annual performance review process, as Moneycontrol reported on January 25.
About 22,000 people were employed by the Bengaluru-based company, not including staff from its fashion website Myntra.
It is anticipated that the reorganization process will be finished by March or April.
Major startups laid off staff in 2023 as a result of the protracted financing freeze as they tried to reorganize their cost structures.
Swiggy, which is headed for an IPO and is getting ready to fire 400 workers after letting go of 380 workers in January of last year, is one of the most recent to join the trail.
To increase productivity, fintech giant Paytm also let go of over 1,000 workers in December. Byju’s, which let go of the most workers in two rounds—3,500—was next, followed by Unacademy (12 percent of all staff), ShareChat (500), Ola (200), and Physics Walla (120) in the previous year.
In comparison to 2022, there were an astounding 58 percent more layoffs overall in 2023 across all companies.
In 2024, the tailwinds are probably going to persist.
More than 20,000 workers have been let go from 85 IT businesses so far in January, including SAP, Salesforce, Google, and Amazon.
Flipkart’s action plan
During a recent town hall meeting with staff on January 25, CEO Krishnamurthy emphasized the need to strengthen the business’s financial position while maintaining its focus on groceries and emerging markets like fintech (loans and payments), travel (Cleartrip), fast commerce, etc.
As the e-commerce company prepares to introduce its payment product in less than a month, financial services has emerged as one of the most recent wagers, Krishnamurthy stated in the interview.
He continues by saying that the business’s significant financial move has no intention of becoming a major fintech or payment company; rather, it is just intended to increase user frequency and accelerate transaction velocity inside the Flipkart ecosystem.
The greater potential lies in our efforts to increase frequency. We encourage visitors to return often in the hopes that they will eventually engage in business. Payments and fintech—the term is sometimes used somewhat loosely—are, in my opinion, extremely different, Krishnamurthy told Moneycontrol.
Flipkart has surpassed rivals Meesho and Amazon to take the top spot in the e-commerce sector with a 48% market share, according to recent research by AllianceBernstein.
The two main product categories for Flipkart’s Indian business are still smartphones and apparel.
Flipkart asserts that the company is currently adequately capitalized to support its goals. Walmart, the company’s parent, contributed $600 million in December toward the bigger $1 billion fundraising round it was planning to raise shortly.
“We adopted the agenda that the business has to become more flexible. The quantity of items we have introduced serves as a gauge for that. On that front, we’ve made significant progress,” Krishnamurthy remarked.
According to him, the majority of Flipkart’s new expenditures would go toward expanding its supply chain and launching new categories, both of which will benefit greatly from artificial intelligence.
The majority of Flipkart’s funding is allocated to forward-thinking ventures in which Flipkart may not yet be the customer’s first choice. A large portion of our investment budget goes into all the areas in which we are now developing,” added Krishnamurthy.
Interestingly, the CEO stated that the company has not made any investments in any other sector or area that has been a part of the organization for more than three years.
In FY23, Flipkart India Private Limited, the e-commerce giant’s wholesale division, witnessed a mere 9.4% growth in revenues to Rs 55,824 crore, while losses increased by 42% to Rs 4,846 crore.
While its net loss increased by 51% to Rs 4,362 crore in FY22, its other significant vertical, Flipkart Internet Pvt Ltd, which offers services including payment gateway, technology, advertising, and logistics management, recorded sales of Rs 10,659 crore.
The business hasn’t submitted its FY23 financials yet.
