Hiring, Firing and Now Deferring
At a time when various e-commerce startups, and the sector as a whole, has been going through a turbulent spell, deferring joining dates of top B-School graduates has sent shockwaves across the industry, forcing institutes to be strict on their placements.
With funding coming down and valuations being slashed, most start-ups in the country are struggling to meet their hiring commitments. While employee lay off and departure of Silicon Valley hires has become a common place, the matter of deferring recruitment came into light when poster boy of India’s e-commerce, Flipkart delayed the joining dates of IIMs and IIT graduates.
The $17-billion e-commerce industry, which is expected to grow to $50 billion by 2020, is one of the leading recruiters from Indian Institutes of Technology and Indian Institutes of Management and is expected to create over 50,000 jobs over the next couple of years. However, the slowdown in the startup ecosystem has given way to a new story, with 16 Indian Institute of Technology (IIT) colleges in the country blacklisting six startups including Flipkart, in interest of their crème de la crème students.
These companies (six startups) will be barred from participating in campus placements from IITs in 2016-17 year, placement heads of 16 institutes decided at a meeting of the All IIT Placement Committee held in Mumbai recently.
While the committee has not disclosed the names of these six start-ups, here’s a list of five tech startups who have deferred the joining dates of students recruited in the past.
Flipkart, India’s largest e-commerce firm, last month deferred jobs to graduates of Indian Institutes of Management (IIMs) and Indian Institute of Technology(IIT) by six months (from June 2016 to December 2016), which it picked during the last campus placement.
The decision has drawn flak from the industry with the chairperson of IIM-Ahmedabad making a page-long mail, sent to Flipkart co-founder Binny Bansal and human resources head Nith Sethi, public last week. The e-commerce firm had made 45 job offers to students from various IIMs. Out of the 45, 11 were from IIM, Bengaluru and 17 were from IIM-Ahmedabad.
Though Flipkart said that the delay was largely due to a corporate restructuring that the company is currently undergoing and will be paying an additional joining bonus of Rs.1.5 lakh to all campus recruits, experts feel that the move may hurt Flipkart’s brand image as an employer during campus hiring in the years to come.
Bengaluru-based logistics start-up Roadrunnr has also walked Flipkart way for the students of Indian Institute of Technology(IIT).
IIT Madras has reportedly said that Roadrunnr had asked some students, to whom it had made offers during campus placements, to report for work only in December, as opposed to their joining dates in June 2016.
In 2015, Roadrunner announced the closure of an $11 million Series A round from Sequoia Capital, Nexus Venture Partners, and Blume Ventures. The company has recently acquired food ordering firm TinyOwl Technology Pvt Ltd and has transitioned into a food ordering and delivery platform. It has also rebranded itself as Runnr.
One of India’s early ‘unicorns,’ InMobi has also deferred the joining date from July 2016 to November 2016. According to a report in The Hindu, the campus recruits had requested the company to reduce the delay by two months, however, the company officials expressed inability.
Lately, the company has also grappled with senior-mid-level attrition. Over the past six months, at least a dozen mid- and -senior-level executives have resigned, and InMobi is reportedly loosing market share in a business dominated by tech’s big daddies Google and Facebook.
The company was founded in 2007 in India with 17 offices across the globe and is backed by Soft Bank and Kleiner Perkins Caufield & Byers.
Hopscotch, an e-commerce platform for baby care products is yet another startup who recently came under fire for deferring placements to a few IIM students.
Just like CarDekho, Hopscotch has reportedly delayed the joining dates of four IIM-B students until September 2016. During the initial phase of placement, these companies fixed the joining date as May or June of this year.
The company recently raised $13 million in series C funds led by Facebook co-founder Eduardo Saverin.
CarDekho, which is valued at $300 million, boasts investors like Ratan Tata, Google Capital, Sequoia Capital, Hillhouse Capital, Tybourne Capital and HDFC Bank.