The competitive e-commerce market in India surely has some downside. It evidently came out on Thursday when Flipkart lay off around 700 of its employees to cut costs.
Reports say that Flipkart, which has just acquired Jabong last week, offered its employees the choice to either resign or be sent off with severance pay, who have failed to meet professional expectations.
Upon contacting, a Flipkart spokesperson confirmed that that a section of employees were being put under performance review but refused to comment on the number of layoffs in the offing. However, rumours are that the number could reach as high as 1000.
“At times, we have employees who do not meet the performance bar. In those situations, we work closely with employees to enable them to improve their performance, if employees are unable to make the desired progress, they are asked to seek opportunities outside the company”.the spokesperson said.
In recent times, Flipkart has faced lowering of valuation which has consequently led them to make several changes in its business model, including raising margins it charges from sellers.
Having about 30,000 employees, this decision would affect some 2.3-3.3% of the workforce.
Flipkart claims this is not a layoff but a regular process that they have been following for a very long time, as do many other prominent companies like Google, Facebook, and Microsoft.
This evaluation happens every six months, according to the company. Employees who are struggling to reach the requirements are given a mentorship programme, counselling, and special sessions. If they still fail to reach that benchmark, many of them will leave by themselves. The evaluation is going on at the moment.
The spokesperson added, “As a performance oriented organisation, we have a transparent evaluation process in place. Employees are assessed in a fair, simple, transparent and development oriented manner. We use our review process to differentiate performance and maintain a high bar, which is reflected in our total rewards philosophy.”
It was also mentioned that the evaluation also rewards top performers and promote them to the next growth level. The “solid performers” are groomed for future roles through mentoring, coaching and on-the-job learning opportunities.
