Right after the Jabong acquisition and valuation changes, Flipkart is in news for making hundreds of their employees leave. The Bengaluru-based online marketplace has said that about 300-400 people will be made to leave in the next 10 days or so – that is about one to two percent out of the workforce of 35,000. This is contrary to claims made in certain media reports that about 1,000 employees are being made to leave.
Is this a sign of India’s most valuable startup going through a really tough phase, or is it a law of nature – survival of the fittest - which every business has to adapt to?
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. According to Flipkart, evaluation happens every six months. 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.
In an email, Flipkart spokesperson told YourStory:
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 recognised 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 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 utilised. This is a fairly common practice across various industries, especially in high-performing internet organisations."
Flipkart got some negative publicity earlier this year when they deferred the placement of 17 MBA graduates from IIM-A by six months. However, they have said that the two developments are not related. “This is not a mass layoff; but a regular process based on performance rather than whole departments being fired. Wherever there is a requirement, we will hire again. In the last two years, we have invested a lot internally, now it’s time to go to the next level,” the spokesperson said.