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TROUBLE

Flipkart has pissed off India’s best B-school

India-Flipkart
EPA/Jagdeesh NV
Casting a shadow.
  • Itika Sharma Punit
By Itika Sharma Punit

Co-editor, Quartz India

This article is more than 2 years old.

India’s best B-school and India’s most valuable startup are at loggerheads.

Earlier this week, Flipkart—India’s biggest e-commerce firm—decided to postpone by six months the joining dates for new recruits from Indian colleges. This upset two of the country’s most prestigious institutes: the Indian Institute of Technology, Madras (IIT-Madras) and the Indian Institute of Management, Ahmedabad (IIM-A).

On May 23, Flipkart said students who were given offer letters to join in June will now be brought on board in December as the company wants to complete its ongoing organisational restructuring.

“The organisational restructuring involves the creation of new business units in some cases and mergers in other cases,” Flipkart said.

To compensate, Flipkart said it will pay a joining bonus of Rs150,000 to each new hire. This bonus, though, is less than the average monthly salary of an IIM-A graduate.

IIM-A was the first to react to this decision and said Flipkart’s future engagement with the B-school may be in jeopardy.

In a curt letter to Flipkart co-founder and CEO Binny Bansal, IIM-A has said its students “now feel cheated” and the compensation being offered is “utterly unacceptable.”

“Our students hired by Flipkart rejected multiple opportunities that the campus had to offer and chose Flipkart over other well-reputed recruiters because of the strength of its brand,” the letter said. “Future engagement of Flipkart with B-school campuses is bound to get affected as a relationship based on mistrust and lack of transparency can never be mutually beneficial.”

The college asked Flipkart to compensate its students by giving them their monthly salaries from June. The company has refused the demand.

Flipkart’s decision could snowball into a serious problem for the entire Indian technology startup community.

On May 26, IIT (Madras) said it may not allow startups to participate in its recruitment season in December. “We are thinking of letting startups recruit in April, after their financial year ends so that they have better visibility on their hiring requirements,” Babu Viswanathan, placement advisor at IIT-Madras, told Mint newspaper.

This is bad news for startups as the best campus talent gets recruited within the first few days of hiring seasons. In 2015, Flipkart visited IITs on the first day of placements and offered annual salary packages between Rs20 lakh to 30 lakh. The company refused to share the number of graduates it picked from campuses this year.

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