Dismissing the reports about giving pink slips to the under performing employees, India’s largest e-commerce player, Flipkart says the company is not laying off but letting go employees who choose to leave.
In an email response to a query, the company spokesperson told Indiaretailing Bureau, “At times, there are 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 utilized.”
“This is a fairly common practice across various industries- especially in high performing internet organizations,” the spokesperson added.
The company says it is a performance-oriented organisation and has a transparent plus a development-oriented evaluation process in place.
“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,” the spokesperson added.
The company, however, agrees that approximately 1-2 per cent of the employees have decided to move out from the organization, pertaining to various reasons. Flipkart currently has above 30,000 employees.
While Flipkart denies laying off employees, the exodus of management-level executives is something that can’t be overlooked. Over the last one years, e-commerce players including Snapdeal, Jabong, Paytm, Flipkart, among others have all witnessed employee attrition, at all levels.
For instance, at least six senior executives have quit Flipkart over the past six months. Among the recent departures were Lalit Sarna and Sunil Gopinath, who were counted among the top talent in the company. Sarna headed the Transactions & Payments Business, while Gopinath was Senior Director Product & User Experience Design.
The duo had joined the company just over a year ago. Earlier this month, Flipkart’s legal head Rajinder Sharma also exited the company.
Meanwhile, at Snapdeal, Anand Chandrasekaran, former chief product officer, quit the organisation in May this year to pursue entrepreneurial interests. Chandrasekaran follows Rajeev Singh, Snapdeal’s Former Associate Director of Market Development, who quit the organisation in April this year to join KartRocket, an e-commerce platform enabler, as its Vice President of Seller Ecosystem.
Though employee movement is common to any business, experts believe the pace at which it’s happening in the e-commerce space indicates challenges related to the organisational structure, expectations from employees, young leadership and lack of robust strategies.
“The current e-commerce scenario depicts a situation wherein the middle management is much more experienced than the top management, which may generate heat on some issues within the organisation,” CEO, Beyond Talent Management Pvt Ltd, Barkat Charania explains.
“Particularly in e-commerce, it is challenging to get the right person with required skills set at the right time. The industry needs professionals who are process-oriented and also have an entrepreneurial overview, people who are strategists and yet should be willing to get their hands dirty,” he notes.
The worrying across-the-board exits indicate that e-commerce firms should consider restructuring their operations in order to focus on business fundamentals, where discount-driven growth and GMVs as profit metrics will no longer be an option.
This is crucial, especially at a time when venture capitalists have begun asking questions on business metrics and profitability and have started controlling big-ticket investments from the beginning of 2016.