Popular e-commerce company Flipkart has chosen to offer salary increases to only 70% of its staff members this year. This implies that about 5,000 of its employees won’t be receiving raises. Employees in Grades 10 and above received an email notifying them of the decision.
According to the corporation, employees in Grades 10 and up won’t get compensation increases. However, the distribution of incentives and employee stock options will proceed as scheduled. Flipkart’s yearly performance reviews are already complete, and the compensation increases are scheduled to start on April 1. This choice was made at a time when many tech firms are looking to reduce expenses in order to boost revenues.
According to a Money Control report, prominent employees at Flipkart won’t be receiving raises this year. The business stated in a statement that it aims to be responsible with its resources. Given the state of the macroeconomic environment, we wish to manage our resources carefully while keeping the interests of our employees in mind. Hence, over 70% of our employee base will continue to get raises in pay, according to a statement from Flipkart.
“In addition, for those who qualify, our stock option allocation and bonus exercise will continue as usual. Through employee-centric policies, ongoing skill development and training programs, regular promotion cycles, wealth creation for ESOP holders, and improved perks, including medical insurance, we remain committed to improving value for all of our employees, the study stated.
According to the article, Flipkart also intends to repurchase employee stock options worth $700 million. This is a component of their plan to fully control PhonePe, a well-known payment app in India. The action is also intended to attract and keep talent, particularly at a time when many startups across the nation are firing staff members due to funding issues.
After the split of Flipkart and PhonePe is completed in the upcoming months, the repurchase is anticipated to take place. Flipkart’s owner Walmart reported a 72% decline in operating profits for its international division in the three months that ended in January. This was mostly brought on by the separation of Flipkart and PhonePe into distinct companies.
Flipkart’s contribution margin is positive and growing in spite of this. It contributes significantly to Walmart’s global e-commerce sales. According to the report, Walmart’s top executives made this announcement during an earnings call earlier this week.