Bengaluru: Days after announcing that Myntra and Jabong would be rolled into Flipkart following Binny Bansal’s resignation as group chief executive, Walmart is set to carry out a massive layoff at Jabong and integrate the online fashion retailer completely into Myntra, according to three people aware of the development. The Jabong layoffs are expected to be announced at a town hall early on Friday morning, said the people mentioned above. All of them requested anonymity.

Jabong currently has 600-700 employees, a majority of whom are expected to be retained and will become employees of Myntra, the people mentioned above said. About 150-200 employees are expected to be laid off, they added. The Jabong site will continue to run, but the traffic from the website will be directed to Myntra, after the merger with Myntra is completed.

While Myntra has been growing fast, Jabong has struggled to expand sales this year. Myntra had bought Jabong in July 2016 from Rocket Internet for $70 million, primarily to avoid a rival buying it.

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Mint reported on Tuesday that Walmart’s decision to put Myntra and Jabong under Flipkart has created uncertainty about the direction of the specialty online retailers, which had largely operated independently within the Flipkart group since Myntra was acquired by the e-commerce firm in 2014.

Walmart wants to keep Myntra as a brand but it is evaluating possibilities of integrating some roles between Myntra and Flipkart’s fashion business, and running the two more closely.

Until now, Myntra, while being a wholly-owned unit of Flipkart, has operated completely independently. Flipkart’s fashion business is headed by former Aditya Birla executive Rishi Vasudev.

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Along with Myntra-Jabong, Flipkart is estimated to control 60-70% of online fashion sales in India. Its dominance in fashion was a major attraction for Walmart, which agreed to pay $16 billion to buy a 77% stake in Flipkart in May.

Myntra and Flipkart did not immediately respond to emails and calls seeking comment, but in a statement sent to Mint earlier on Thursday, Flipkart CEO Kalyan Krishnamurthy had reiterated the importance of ensuring that Myntra continued to operate as an independent platform.

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“The Flipkart group is committed to the success of Myntra and growing the business, now more than ever. The Myntra team has been doing innovative work to grow the company and create India’s leading online platforms for fashion and lifestyle. We want to empower the Myntra team to continue to operate independently to achieve even greater success," Krishnamurthy said in the statement.

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