IPO-Bound E-commerce Giant Flipkart Likely Mulls Layoff; How Many Employees May Lose Their Jobs?

The New Year 2024 has broadly been cruel to those looking to work in the technology sector as many tech biggies like Amazon and Google fired thousands of their employees. The layoffs are done to minimise costs amidst challenging macro conditions. It looks like India's e-commerce giant Flipkart to joining this league and planning at least a thousand job cuts.

US retailer Walmart-backed Flipkart is likely to let go of approximately 1,000 employees represents 5% of the total workforce, people familiar with the matter told MoneyControl.

It needs to be noted that Flipkart has not made any official statement on the layoff, and GoodReturns.In could not confirm the same.

Approximately 22,000 people are on the payroll at Flipkart, excluding employees under the ambit of Myntra, another online shopping platform.

As per the report, it is said that Flipkart takes performance-based jobs cost cuts every year. The latest layoff is likely to be along similar lines as well. MoneyControl reported that Flipkart CEO Kalyan Krishnamurthy in a townhall meeting on January 25, said that the company's financial health is improving and is expected to be in much better shape by the end of the year.

The sources revealed that Flipkart may push its initial public offering (IPO) plan to next year as they expect unit economics to be better by then.

Walmart became a majority stakeholder in Flipkart back in 2018 by paying approximately $16 billion for an initial stake of approximately 77% But since then, the American brick-and-mortar retailer has been acquiring other shareholders stake in Flipkart as well.

Last month, as per reports, Walmart invested further up to $600 million in a fresh round of funding in Flipkart which is in the middle of raising $1 billion. It was known that the rest of the $400 million would flow into Flipkart via other internal shareholders and a few external investors. This funding will take Flipkart's valuation to a premium of 5-10% from its last valuation of $33 billion.

In the first six months of 2023, it was known that Walmart acquired about $3.5 billion worth of shares from its non-controlling interest holders.

As per Layoffs.fyi data, so far in 2024, 82 tech companies have laid off up to 23,670 employees. The latest layoffs come from Microsoft, Swiggy, Storytel, SAP, and Aurora among others.

Also, as per the trueup.io tracker, So far in 2024, there have been 153 layoffs at tech companies with 32,626 people impacted (1,305 people per day). In 2023, there were 1,996 layoffs at tech companies with/ 428,384 people impacted (1,174 people per day).

The Flipkart Group is one of India's leading digital commerce entities and includes group companies Flipkart, Myntra, Flipkart Wholesale, Flipkart Health+ and Cleartrip. Started in 2007, Flipkart has enabled millions of consumers, sellers, merchants, and small businesses to be a part of India's digital commerce revolution, with a registered customer base of more than 400 million, offering over 150 million products across 80+ categories.