Friday , May 27 2022

Jabong, Myntra merged, a 10% workforce to face job cuts


Things get angry at Jabong. If the top level bend did not have an online fashion retailer bad enough it may now look at a pink slip season.

Sources known to the development tell The Economic Times that Jabong, who was acquired by the Flipkart fashion unit, Myntra in July 2016, was expected to eliminate a significant part of a workforce in Gurgaon as part of the restructuring effort that is being made in the post of the Flipkart Group of the deal with Walmart. As a whole, Jabong could reduce 40-50% of a 400-strong workforce.

On Tuesday, in his statement announcing the resignation of Binny Bansal, co-founder of Flipkart, Walmart had outlined a significant change in the group. "On going on, Kalyan Krishnamurthy will continue to be CEO of Flipkart, which will now include Myntra and Jabong, will continue to act as separate platforms in the Flipkart business. Ananth Narayanan will continue to provide great leadership as Chief Executive Officer of Myntra and Jabong, and reporting to Kalyan, "read the statement.

With this movement, Walmart is clearly trying to drive more synergies between the Flipkart fashion business and the bilingual platforms. The days added, although Flipkart Fashion and Myntra will continue to be run independently, it is not clear how much focus will continue on Jabong and will continue to operate.

According to sources, the move is expected to start with the restructuring of Jabong, where all operations, including technology and corporate functions such as Human Resources and finance, will be combined with Myntra. Jabong is also likely to move the foundation of Bengaluru from Gurgaon. Recent layouts in Jabong could affect ten per cent of the full-time workforce in the combined entity Jabong-Myntra.

Significantly, in a statement yesterday, Krishnamurthy said he was committed to growing Myntra's business, not to mention Jabong. "The Flipkart group is committed to the success of Myntra and grow the business, now more than ever. We want to empower the Myntra team to continue to operate independently to achieve even greater success, "he said.

However, this year's sub-par Myntra performance makes a case for integration with Flipkart. Myntra is said to have lost its revenue target for 2018, with Jabong contributing to the shortfall. It is expected to announce an announcement on this soon, source said daily.

Although the guess that Narayanan put in his papers soon would have been proven wrongly with the man telling Reuters that he will continue to lead operations, the Flipkart Group has see a number of high level edges recently. CFN Myntra-Jabong, Dipanjan Roy has also stepped down, the sources alleged. In addition, last month, Gunjan Soni, chief of Myntra's marketing officer and head of Jabong, and Ananya Tripathi, the chief officer of Myntra's strategy and the head of the categories, announced their decision to leave the organization at the end of December.

Business merger is likely to simplify operations in the Flipkart group. Although its fashion business is run by almost 100 employees, 1,000 people deal with the same functions in Myntra. "The whole purpose has been directed towards cost savings in operations and marketing," said Satish Meena, Advanced Forex Analyst in Forrester, every day. "That's what Walmart wants them to do in the fashion category through private labels that belong to Flipkart and Myntra, while also trying to bring their own private labels to India."

But at present, opinions are shared on Myntra's aspiration. Although people say that Flipkart, Myntra and Jabong Fashion will be integrated whenever there are synergies, while the forehead will continue to operate separately, others say that Myntra is likely to maintain its independence.

Edited by Sushmita Choudhury Agarwal

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