In just around six months after Walmart acquired a controlling stake in Flipkart for a record $16 billion, India’s largest homegrown e-commerce firm is going through a big shakeup.
In just around six months after Walmart $WMT acquired a controlling stake in Flipkart for a record $16 billion, India’s largest homegrown e-commerce firm is going through a big shakeup.
From leadership to business divisions, the overhaul at the Bengaluru-based company has caused some damage, including job losses:
These changes, many in India’s startup community say, were expected.
“Culturally, Flipkart and Walmart are different. Walmart is frugal and would want to instate that in Flipkart too,” said Satish Meena, senior forecast analyst at Forrester Research. “We have seen with Walmart’s other acquisitions also, like Jet.com, where it brought several cultural as well as management changes. Flipkart, I believe, will become more transparent in its financials, be more frugal and agile.”
Drastic changes initiated by the new owners could weigh heavily on employee morale and the company’s culture. However, Walmart is confident about what it’s doing.
“We have taken appropriate actions to change the reporting structure (at Flipkart) and we feel good about the bench,” Dan Binder, vice-president for investor relations at Walmart, said about Binny Bansal’s exit during a post-earnings call on Nov. 16. “…when you look at a company like Flipkart, when you get to that size and that level of complexity, it’s not only about one person.”
The changes brought by Walmart will make Flipkart more professional, said Kris Lakshmikanth, CEO at HR consultancy firm The Head Hunters. “Flipkart was already on that path before Walmart came in, when Kalyan Krishnamurthy, a proven professional, was put in charge,” he said.
So far, Flipkart has had an extravagant startup-like culture. But Walmart is changing that. For instance, it has issued an advisory barring the consumption of alcohol on campus from now on, a Flipkart employee told Quartz.
“But the sentiment amongst Flipkart employees is not sombre in my opinion. It is only the loyalists of Binny Bansal and Sachin Bansal who are looking to exit the company,” Lakshmikanth said. “There are job-seekers from Jabong, because of its impending merger with Myntra, but we don’t see people leaving Flipkart in hordes because of the changes.”
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