Walmart-owned Flipkart has reportedly begun a workforce reduction that could see 5-7% of its total team being trimmed and is scheduled to be completed by March-April.

What Happened: The ecommerce giant has been conducting annual performance-based job reductions for the past two years and has frozen fresh hiring in the last year to control costs, Economic Times reported, citing sources. The reduction is occurring concurrently with the firm’s $1-billion (₹8,306 crore) financing round from Walmart and others.

Flipkart, India’s largest ecommerce company with 22,000 employees, excluding Myntra, plans to better utilise resources across existing and new businesses, the sources said.

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Big Decisions Coming: The restructuring and the roadmap for 2024 will be discussed and finalised at a gathering of senior executives next month. While there are no plans to revisit the decision to postpone its public offering until 2024, Flipkart is reportedly actively reassessing existing and new lines of business.

Similar to other large Indian internet firms, Flipkart is looking to rationalise its teams after aggressive hiring in 2021. The company is expected to invest further in its hotels business, particularly in Cleartrip, which has reached about $1.5 billion-1.7 billion in gross merchandise value. Grocery and Shopsy, its social commerce business, will continue to be in focus, while the company explores ventures in the fintech space through Super.money.

Why It Matters: While $600 million in new capital has come into the company from parent Walmart, its senior management is looking to reduce burn in various categories. Grocery and Shopsy will receive backing from the group, while Flipkart Health Plus may not see equal allocation of resources or capital, sources told the business daily.

Smartphones, large appliances and fashion remain core to Flipkart’s business, but the company is actively scaling new businesses to widen its total user base and diversify offerings.

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