Flipkart rejig faces IIM-A speed bump

  • HT Correspondent
  • Updated: May 26, 2016 06:03 IST

BENGALURU: The organisational restructuring that Flipkart’s new CEO Binny Bansal is undertaking has faced its first major pushback.

As part of its restructuring exercise, Flipkart recently decided to delay the joining of 18 candidates it had hired from Indian Institute of Management, Ahmadabad by six months to December this year, a decision that apparently has not gone down well with India’s premier B-school.

As part of revised position that expects the fresh graduates from IIM-A to wait for six months to join a job, Flipkart has offered to pay one-time lumpsum amount of ` 1.5 lakh to each of the candidates.

Unhappy with both decisions — to defer on-boarding and the amount offered as compensation for waiting — the institute’s administration has written to Flipkart seeking guarantee that all those hired from IIM-A will have a job in December at the company and offer a better sum as compensation for the waiting period.

In a ready to use FAQ Flipkart has shared on this development, it said, “In the past few months, we’ve been working on restructuring our businesses to strike the right balance among key levers such as innovation, strategic execution, and operational excellence. The organisational restructuring involves the creation of new business units in some cases and mergers in other cases. For example, we integrated our engineering organization and created new units like the customer shopping experience group. This restructuring process is ongoing.”

A Flipkart spokesperson also said that it was not just those hired from IIM-A but from several other B-schools and engineering colleges, including the network of Indian Institute of Technology who have been requested to wait till December.

The company however did not give the number campuses it had hired from or the total number of fresh hires . “Under the new organisational structure a centralised hiring process will not work,” the company spokesperson said.

Asha Kaul, chairperson, IIM-A placement committee, said the institute will be take questions over this development tomorrow as a media team was being in put in place to ensure undistorted facts are disseminated.

Binny Bansal, co-founder of Flipkart, had taken charge as CEO of the company has been on a restructuring mission that reportedly also involves big changes to cut costs. The company had also come under severe criticism after four of its investor devalued their holding in the company in the range of 15-40%.

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