Home / Companies / News /  Flipkart defers joining dates of IIM graduates by 6 months

New Delhi/Bengaluru: India’s largest e-commerce firm Flipkart.com has deferred by six months the joining date for graduates of the Indian Institutes of Management (IIMs) to whom it made job offers, as the company looks to cut costs amid a funding crunch.

The move may hurt Flipkart’s brand image as an employer during campus hiring in the years to come. The prestigious IIMs are considered the most important recruiting ground for companies.

Mint reported this month that Flipkart, which has been struggling to raise fresh funds, has slashed hiring along with spending on discounts and marketing. Apart from hiring a few senior leaders, Flipkart has reduced hiring to a trickle over the past two months in order to save costs, Mint reported on 6 May.

The delay in joining dates could impact the relationship between B-schools and Flipkart, an email from the office of IIM-Ahmedabad’s chairperson to Flipkart co-founder Binny Bansal and human resources head Nitin Sethi said. The e-commerce firm had made 17 job offers at IIM-Ahmedabad.

He also demanded that Flipkart give a written commitment that these students will be absorbed by December. The B-school also requested that either the period of deferment be lowered or the compensation for deferment be increased. Mint has seen a copy of the letter.

“While we understand that restructuring calls for tough decisions in an organization, the matter of campus hiring could have been handled much better, with campuses forewarned well in advance and engaged as partners in this decision-making. Rude shocks due to unilateral decision-making does little to help strengthen relationships with the campus," the letter added.

Flipkart said the delay is largely due to a corporate restructuring that the company is currently undergoing.

“We have re-designed our campus program in order to align that with our new business focus and provide meaningful opportunities to our campus hires. As part of this re-design, we are looking at a decentralized program that takes into account specific business needs as per the business unit. As part of the redesign process, we will be postponing the joining of the new recruits by a few months. This postponement was necessitated by the fact that Flipkart is undergoing an organization redesign that involves creation of new units in some cases and integration of a few units," Flipkart said in a statement. “Instead of June 2016, the new recruits will now be part of the improved campus program in December 2016. Flipkart will also be paying an additional joining bonus of 1.5 lakh to all campus recruits."

The IIM-Ahmedabad spokesperson could not be immediately reached for a comment.

The deferring of joining dates typically happens when companies are unable to predict or wrongly predict the demand for fresh recruits. Most start-ups in the country are struggling to meet their hiring commitments in the face of a funding crunch.

Apart from discounts and advertising, employee costs are the largest expense for e-commerce companies.

Flipkart’s workforce expanded to more than 35,000 people by December from roughly 14,000 people 12-18 months ago. More than half of these people work in the company’s logistics business eKart, delivering products to customers across India; the company is expected to reduce the workforce at eKart, too.

Flipkart entities reported a loss of 2,000 crore for the year ended March 2015 and rival Snapdeal posted a loss of 1,328 crore in the same year. In the last financial year, the losses at both firms are likely to have risen, according to analysts and investors.

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