Bangalore: Flipkart Online Services Pvt. Ltd is struggling to retain senior and middle managers at a crucial stage in the company’s efforts to maintain high growth while shifting its business model.
At least seven senior and mid-management executives have quit the e-commerce firm in the past four months, according to two people with direct knowledge of the matter.
Rajesh Choudhary, vice-president, finance; Aswin Chandrasekaran, head of Flipkart’s books business; Ashok Banerjee, vice-president, engineering; have resigned, the people said, requesting anonymity.
Rohit Jalan, senior software automation engineer; Prasanna V., engineering manager for Flipkart’s seller platform; Gaurav Lochan, engineering manager of digital; and Marcus Terry, director, seller operations; have also resigned, the people said.
Five of the seven executives confirmed they had resigned but wouldn’t disclose the reasons or their next moves. Mint couldn’t reach the other two people.
The management churn comes as the company is shifting to a marketplace model from its direct online retail business to control costs and comply with regulations related to foreign direct investment (FDI). The shift may slow the growth rate at the company, which has been increasing its sales in triple digits in the past three years, analysts have said.
Flipkart said in February that chief financial officer Karandeep Singh had quit due to personal reasons, without elaborating.
The company, founded by Sachin Bansal and Binny Bansal in 2007, offers salary increases of 10-20% to attract experienced executives for senior management roles from bigger companies such as Google Inc. and VMware Inc., a third person familiar with the matter said, also declining to be named.
Sachin Bansal is the chief executive and Binny Bansal the chief operating officer.
Of the senior executives who resigned this year, Banerjee, was hired from Twitter in San Francisco and Choudhary from liquor company Pernod Ricard.
“They have a leadership issue at the top. If you look at it, Sachin and Binny don’t have the same amount of experience as some of the people they have hired for these senior management positions, and as a result it’s tough for some of these guys to work under them,” said the third person, who is an executive at a recruiting firm that hires people for start-ups and technology firms.
Many young companies face similar problems of retaining experienced people, said Shashi Kiran, associate director of TiE-Bangalore, an organization that advises and mentors entrepreneurs.
Very few recent Indian start-ups have reached Flipkart’s size and faced accompanying difficulties with managing growth and poaching of its top talent.
“Every company goes through these stages,” Kiran said. “And they’re going through their own.”
Flipkart is one of the largest firms in India’s fast-growing e-commerce market, which is valued at $10 billion, according to a May report by consultancy Technopak Advisors Pvt. Ltd.
“Employees join or exit companies for a number of reasons and we would not like to comment on specific individuals,” a Flipkart spokesperson said by email.
Flipkart, which raised $150 million last year from investors including Tiger Global, is being probed by the Enforcement Directorate related to compliance with FDI rules.
India allows foreign investment in the marketplace model, where independent merchants sell products to shoppers through sites such as Flipkart, but it is banned in direct online retail.
Mark Bergen contributed to this story.