The monthly Friday town hall meetings at Flipkart, where top executives assemble in a hall packed with employees to take questions, came as a shocker for many as the company’s co-founder Sachin Bansal confessed he was replaced as chief executive because of performance.
While the town hall meetings have been a ritual for the company in past years, the recent meeting was different as employees who generally ask questions on employee stock option plans, public listing timelines, paternity leave, among others were fuming as to why they had to pay the price for management decisions.
Cooling down employees, Bansal said even he was replaced due to performance. He was replaced as CEO by co-founder Binny Bansal in January and made executive chairman.
“Look at the top level around you. Everyone has changed. In fact, even I am gone. Some of our targets have been missed and everyone, including the top management, has paid the price,” said Sachin Bansal during the Friday meeting. Bansal’s admission diffused tensions immediately, with nearly 200 employees applauding his revelation.
Bansal’s revelation will likely help boost employee morale, especially at a time when the e-tailer is preparing for the festive season next month. As per a report, Amazon India is expected to outspend Flipkart in terms of marketing and discounts.
From the past year and half, India’s largest e-commerce giant has come under radar of investors with stagnate growth and fierce pressure from global rival Amazon. The company has been buffeted by a series of valuation markdowns by mutual funds, several high-profile executive exits and staff reductions
In the past Flipkart has seen the exit of Mukesh Bansal – considered the right hand man of Sachin and Binny Bansal, Ankit Nagori – a long-time Flipster and Chief Business Officer, Punit Soni – Flipkart’s high profile hire from Silicon Valley and Manish Maheshwari – head of seller business.
The company’s growth has stalled over the past few quarters while Amazon India has maintained a brisk pace of growth. According to research firm Redseer Consulting, in the quarter that ended March, Flipkart’s growth was stagnant and Amazon was catching up, even beating rival Snapdeal to take the place as India’s second largest e-commerce marketplace.
Flipkart recently came under fire when the news started picking up that the company has asked 700-1000 employees to either resign or sent off with severance pay. Before this, deferring recruitments to IIM graduate has also created trouble for the company.
The company, however, denied reports of employee lay off as a course correction measure.
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.