After effects of Walmart-Flipkart deal? Jabong may lay off 50% workforce as part of rejig

Flipkart-owned online fashion retailer Jabong has planned to lay off a substantial portion of its workforce as a part of its restructuring move.

It is being speculated that Walmart is planning to drive more synergies between Myntra and Jabong. (Image: AFP)

New Delhi: A lot has been happening at country’s e-commerce giant Flipkart over the past few months. In a recent report, Flipkart-owned online fashion retailer Jabong has planned to lay off a substantial portion of its workforce as a part of its restructuring move. According to a report by Economic Times, the e-commerce major is expected to lay off 30-40 per cent of its total workforce in Gurgaon as a part of re-structuring at Flipkart Group. It is being speculated that Walmart, which holds majority stakes in Flipkart, is planning to drive more synergies between Myntra and Jabong along with Flipkart’s fashion business. As of now, Jabong has around 400 employees on its payroll. Walmart, the US-based retailing giant, which recently acquired Flipkart for $16 billion, is looking to streamline Flipkart’s fashion segment. The ET report further stated that the restructuring of Jabong will involve the merging of its technology and corporate functions with that of Myntra’s. Flipkart had bought Jabong in 2014. It is expected that a formal announcement regarding the same would be made anytime soon and Jabong along with Myntra together have been asked to move all their operations to Bengaluru and cut down its workforce. However, there is no clarity over Jabong’s operations after the consolidation exercise takes place. However, the report also suggests that the move has been taken on the backdrop of losses made by Jabong during the past two quarters. Meanwhile, Flipkart has witnessed a serious management change over the past one year with the recent one being its co-founder Binny Bansal stepping down from his position following the accusation of ‘personal misconduct’. However, Bansal, who along with Sachin Bansal had co-founded India’s biggest online retailer Flipkart, denied all the allegations made against him. The Bengaluru-based e-commerce major is now controlled by Walmart Inc after the latter acquired 77 per cent of Flipkart’s stake for $16 billion in May 2018. Even Sachin Bansal had tendered his resignation to the company following the announcement of US-based retail giant's acquisition of a major stake in Flipkart.