Flipkart, a popular e-commerce company, has decided to roll out salary increments to only 70 percent of its employees this year, which means that around 5,000 of its staff will not be getting a raise.
The decision was communicated through an email to employees at Grade 10 and above levels, stating that employees who are at Grade 10 or above will not receive any salary hikes.
However, the distribution of bonuses and employee stock options will proceed as scheduled. Flipkart's annual performance reviews are already complete, and the salary increases are scheduled to start on April 1.
This choice was made at a time when many tech firms are looking to reduce expenses in order to boost profits.
A Money Control report states that senior Flipkart employees won't be receiving raises this year.
The company has made it clear that it wants to exercise caution and effectively manage its resources. "Given the macroeconomic environment, we want to manage our resources prudently while keeping the interests of our employees in mind.
Accordingly, roughly 70% of our employee base will continue to see increases in their pay "Declared Flipkart in a statement.
"Additionally, our stock option allocation and bonus exercise will continue as is for those who qualify.
We remain dedicated to improving value for all of our employees thru the employee-centric policies, ongoing skill development and training programmes, regular promo cycles, wealth creation for ESOP holders, and improved benefits, including health insurance "the report stated.
According to the report, Flipkart also intends to repurchase employee stock options worth $700 million. This is a component of its plan to fully control PhonePe, a well-known payment app in India.
Additionally, the initiative aims to draw and retain talent, especially at a time when many startups across the country are letting go of employees due to financial difficulties.
After the disconnection of Flipkart and PhonePe is completed in the upcoming months, the buyback is anticipated to take place.
Flipkart's owner Walmart revealed a 72 percent decline in operating income for its international division during the three months ending in January.
This was primarily brought on by the separation of Flipkart and PhonePe into separate companies.
Flipkart's marginal revenue is positive and growing in spite of this. It makes a sizeable contribution to Walmart's overall global e-commerce sales.
Top Walmart executives reportedly disclosed this information during an earnings call earlier this week.
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