Flipkart asks underperformers to resign or take...

Flipkart asks underperformers to resign or take severance pay, 1,000 jobs to take hit

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Flipkart asks underperformers to resign or take severance pay, 1,000 jobs to take hit

By Aditi Shrivastava, ET Bureau | Jul 29, 2016, 10.46 AM ISTPost a Comment


BENGALURU: Flipkart is offering employees who have failed to meet professional expectations the choice to either resign or be sent off with severance pay, according to three people directly aware of the development at India’s largest online retailer.

The decision is expected to impact 700 to 1,000 staff, two of the sources, who are part of the senior management team at the Bengaluru-based company, said.

“The cleanup is a part of the process of making Flipkart a lean organisation,” said one of the people cited above.

The move, while not unique to Flipkart, is reflective of the challenging times for the online retail industry, as well as the company, which is attempting to find a balance between saving costs and chasing growth.

While the absolute numbers look large, Flipkart has about 30,000 employees, which means the decision affects some 2.3-3.3% of the workforce. What is raising eyebrows is also the fact that such occurrences are not common at Flipkart, which has expanded rapidly in recent years and tended to take a benign view of those at the bottom of the performance hierarchy.

Now, however, things have changed as chief executive Binny Bansal strives to maintain the market leadership of India’s most valuable startup while putting the company on a path to profitability. Flipkart came in for some criticism earlier this year after it deferred the joining dates for campus recruits from the Indian Institutes of Management.

In a statement Flipkart said that in situations where employees do not make “progress” despite being put on a performance improvement plan, “they are encouraged to seek opportunities outside the company where their skills can be better utilised.”

It did not directly address the question of how many employees would be affected or how common it is for such a thing to happen.

“This is a fairly common practice across various industries- especially in high performing internet organisations,” Flipkart said.

With the rising importance of profitability in the calculus of investors, ecommerce companies are hunting furiously for cost-saving and efficiency avenues. In April, ET reported that Flipkart had begun curbing discounts and capping salary increments. It is also aiming to cut its monthly burn rate to $40 million from the about $ 80-100 million in the first half of 2016.

Rival Snapdeal, too, has been taking a harder look at those it believes are among its worst performers, ET reported in February. Around 200 of them were asked to shape up or ship out.

The last time there were drastic cutbacks at Flipkart was in May 2013, when some 250 employees were affected, constituting about 10% of the workforce at that time.

In recent months, roles and expectations kept changing, said one employee of Flipkart who resigned from the online retailer on Tuesday. “I chose to resign and sent a formal mail to my manager, which was immediately accepted,” this person told ET. He had worked for three years in the company in several roles, with the last one in the marketplace division.

“While the company has been patient with its employees over the last four years, this time it was not,’ he said.

Experts are of the view that cutting down excess fat in an organisation is important to keep the culture of the company focused on goals and delaying the cycle isn’t good for the employees who are under-performers.

“Managers should have good facts and data substantiating why a particular person is a non-performer, and base his decision on factual data,” said Harish Kumar, Managing Partner at Wenger & Watson. “There is also a lot of referencing that happens in this space and an organisation should be helping them in that regard as well,” he added.

(Source – http://economictimes.indiatimes.com/small-biz/s...)

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Deal Lieutenant

I guess these are first level customer support executives who were of course given bad ratings by disgruntled costumers. When the management itself had asked these executives to reject every claims made by the customers this was bound to happen. With such a work environment more people are bound to seek opportunities elsewhere as they wont be sure as to how long they would remain. Flipkart is going down one step at a time because of its bad customer support and have to get their act right. Couple of years back wsretail came up with a distribution center which was quite big near to my house and now that I see that I see a ‘To-LET’ board on the front.

I have known some people working with amazon here in Bangalore and they really like the work environment there. For most of them it was their first job but they say that they would continue to work there if the same work culture is retained. Not sure how long amazon would continue this employee appeasement policy here in India, because in US people are unhappy they way they handle HR and call it punishing on the employees

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Deal Major
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its not good, its a downfall of flipkart…..

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Deal Captain
@Praveen Vishnu Shamain wrote:
@Spock wrote: arey but Sachin is one of the main promoters https://cdn1.desidime.com/assets/textile-editor/icon_confused.gif https://cdn3.desidime.com/assets/textile-editor/icon_sad.gif and a key functionary in the top management !

aisey resign karne ko bola tou kaise chalenga bawa ?!! market image would go down.

do not worry @Spock, such people (as those whose ouster might cause distressed whispers or loss of goodwill) have been given lateral shift within group companies.

ah is it ¿ then it’s alright.

something for them to keep earning their daily bread even if they are incompetent.

I was reminded of our commander in chief’s grief at seeing Marcus Weller loose his purse and family investor jewels.
Didn’t want CoC to again be saddened (like he was the other day) …


@hese wrote: https://techcrunch.com/2016/07/26/once-promisin...

Thats sad!

Budding Star

So the bansal brothers will also be taking up the severance pay? https://cdn3.desidime.com/assets/textile-editor/icon_lol.gif

It seems flipkart now needs to start the invaluable valuation process.

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Deal Captain

👆👆 http://www.desidime.com/forums/dost-and-dimes/t... 👆👆

@Utsav wrote: So the bansal brothers will also be taking up the severance pay? https://cdn3.desidime.com/assets/textile-editor/icon_lol.gif

It seems flipkart now needs to start the invaluable valuation process.

+1 https://cdn3.desidime.com/assets/textile-editor/icon_lol.gif

260118 retweets 289427 likes !!! :SHOCKER: