It’s said in the world of startups, it is always the survival of the fittest. Whether you’re a company or an employee, you work, you perform, show results, only then you get to stay; otherwise it’s ta-ta, bye-bye, sayonara and you’re quickly shown the door. Flipkart, one of India’s most successful e-commerce startup employees are currently facing this very scenario.
According to reports doing round in the media, the Indian e-commerce giant is letting go of its underperforming employees in line with its strategy to have a leaner organisation structure and make an optimum use of its monetary resources. Apparently, the company has already asked some 700-1000 of its employees to either resign or be sent off with severance pay.
Industry experts are considering this step taken by Flipkart as a response to the recent valuation slash down that the company faced by Morgan Stanley and its continuous trouble in finding funding from investors. Prior to this, Flipkart was in the news for deferring the joining dates of its IIMs campus recruits.
Currently an organisation of 30,000 employees, Flipkart’s aim is to be profitable and sustain it. In the times, when the online retail industry is experiencing a lull period and witnessing a number of shutdowns, Flipkart’s strategy to strike a balance between its growth goals and costings seems like an intelligent decision on the part of the organisation.
Recently, the company even placed a cap on the salaries of its employees and put a curb on its discount pricing. It is also striving to cutback its monthly burn rate by approximately 50 percent from about $ 80-100 million in the first half of 2016 to $40 million.
Recent times have seen a number of startups going on a layoff spree in an effort to realign their resources and focus on their core areas. One of the major layoff this year has been Grofers which let go off 10 percent of its workforce this year in June. In addition to this, Hiree decided to fire about 80% of its workforce in April and was joined by InMobi letting go off close to 100 of its employees. January also saw more than 150 CommonFloor employees getting the pink slips when the former was acquired by Quikr.
In an effort to curb the rumours and regain the confidence of its employees, Flipkart has issued a statement stating, “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. The top performers are rewarded highly and promoted to the next growth level. The solid performers are accordingly recognized and groomed for future roles through mentoring, coaching and on-the-job learning opportunities. 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. In due course, if these employees are unable to make the desired progress, they are encouraged to seek opportunities outside the company where their skills can be better utilized. This is a fairly common practice across various industries- especially in high-performing internet organizations.”
This is a developing story. Keep watching this space for more updates.