Lay-offs a 'normal phenomenon' as Walmart plans to aggressively grow in India

walmart-flipkart deal [File] Representative image

Ever since the resignation of Binny Bansal as the group CEO of Flipkart, many media reports have been doing rounds about a possible restructuring of the company and the Myntra-Jabong CEO Ananth Narayanan had also resigned. However, as per the latest reports, Narayanan has stated that he is very much the CEO and is excited about Myntra-Jabong.

However, the broader strategy of Walmart, as of now, would be to aggressively grow in India and maintain the numero uno position of Flipkart in the country as they take head on against Amazon.

Meanwhile, experts observed that layoffs are a normal phenomenon as any acquisition has its share of sacking so as to avoid duplication.

According to Kris Lakshmikanth, the CEO and founder of the executive search firm Head Hunters India Limited, Walmart wants to initially make a foothold in India and is most likely to retain the top management of the company as they want to expand aggressively. “Kalyan Krishnamurthy, the CEO of Flipkart, and Ananth Narayanan of Myntra-Jabong is likely be retained by Walmart for the time being as the American major wants to increase its foothold in India. After having been left behind in the race to be number one in the US market and other markets, Walmart would like to maintain the number one position in the Indian market through Flipkart. All these reports about Krishnamurthy and Narayanan are mere speculations which may not be true,” remarked Lakshmikanth.

Lakshmikanth observed that Krishnamurthy and Narayanan are likely to continue with Flipkart and Myntra-Jabong respectively, since both of them currently have a few job options in the e-commerce field at that level, especially, due to the consolidation in the market. “I feel that Amazon will pump in more investments in the Indian market to take on Flipkart and the war will further intensify. I feel the job losses can be of some fashion designers, photographers, etc, who are now having duplicate roles. Such things are normal when an acquisition and merger happens duplicate job roles have to go,” said Lakshmikanth.

Murthy B.S., the CEO of Bengaluru-based firm LeadershipCapital, is of the opinion that things are going to become clearer by December as Walmart is going to come up with a plan for the Indian market for the next year. “The aim of Walmart will be to increase their market share from around 44 per cent to about 55 per cent. I would not be surprised in case Walmart brings in its own people from the US to run the show. The have pumped in around $ 16billion through this acquisition and may pump in additional $3-4 billion more in the Indian market. Gradually, they would like to take full control here and not give a free hand to the Indians to run the show. With such a huge investment at stake, Walmart is answerable to their shareholders. They need to justify the investments by capturing a huge market share in the Indian market,” said Murthy.

Whatever the case, it would be a wait and watch for all market experts and see how things unfold and how Walmart plays its next move.