It isn't 'lay-off', its 'letting go off' people: Flipkart

The e-commerce company had recently deferred the joining dates if IIM Ahmadabad graduates.

Diksha Gupta,

The recent news that Flipkart is handing pink slips to about 700-1,000 people has ignited the debate on the operation startups yet again. While everybody is discussing the future of one of India's biggest e-tailers, Flipkart came up with its stand on letting go off people. Although it sounds a bit unconvincing, but Flipkart says that it is letting go off the 'underperformers'.

Flipkart has stated that it is a 'performance oriented organisation' and has a 'transparent evaluation process in place.' While it believes in rewarding the top performers, 'at times' Flipkart has to take a stand on people who 'who do not meet the performance bar'.

A spokesperson from the company had stated, "in those situations we work closely with employees to enable them improve their performance. In due course, if these employees are unable to make the desired progress, they are encouraged to seek opportunities outside the company where their skills can be better utilised. This is a fairly common practice across various industries- especially in high performing internet organisations."

It should be noted that Flipkart has deferred the joining dates of fresh recruits from Indian Institute of Management, Ahmedabad earlier. Sending out a strong worded email to Flipkart CEO Binny Bansal, the chairperson of the prestigious institute had said that the delayed joining dates from July to December 2016 and offer of mere Rs 1.5 lakhs as compensation was "utterly unacceptable."

Flipkart replied to this with a blog post where it stated why the company had to delay the dates of joining of IIM recruits. The company stated, " we understand that it will disappoint a few students in the short term. However, we believe that it is important for us to bring our new campus recruits into an environment that is conducive to their learning and overall development."

Is it about over-hiring more than under-performance?

HR industry experts opine that in case of startups, the growth and subsequent hiring is very fast paced. While one may challenge their manpower planning, it could also be a case of filling gaps and expediting the growth process.

Sunil Goel, MD, Globalhunt, shares, "In a startup mode, especially when it comes to a new-age business like Flipkart, where they are addressing a new-age market segment, the investors want to grow very fast. At project stage more and more people are required because everything is unstructured and a lot has to be created. But once that is done and the company crosses the phase one, things chnage drastically. Business processes are set-up only by then. Technology has taken over a lot of human intervention areas after the initial stage. But once that phase is crossed, suddenly company realises that they have over-hired people.  The excessive hiring is done in the interest of time to fill the gaps at a faster pace."

However, it is not organic completion of work. It is like if one person can do a task in five days, making five people work on that task will take just one day. They end up hiring more people eventually. Sunil asserts, "Such hires are generally people who are set in some traditional industry and want to experiment who get attracted to these jobs. But the mismatch happens when the expectations of new-age businesses like working hours, work pressure, et al, is very different from a conventional work set-up. The dynamics of start-ups is also different. Normally a company will grow from a 1000 people company to a 5000 people workforce in two years time. However, start-ups may want to have similar growth in about 8-9 months, which is not an organic growth. Their manpower planning is expected to go dynamic. Flipkart can no longer be called a star-up as it is a leader in its domain, but the pace of growth and expansion in this case was so high that this was bound to happen." 

He also emphasises that in the rush to hire people, the startups tend to pay additional price. However, at the time when company decides to downsize, it is this set of over-priced people who come under the axe first. Flipkart reportedly had a headcount of 35,000 people, out of which around 15,000 are employed by the logistics unit EKart as delivery personnel.