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THE BIG STORY

Inside Flipkart: a high-

pressure workplace thanks
to its IPO dreams. And
Walmart

By Nuha Bubere

The absence of salary hikes and relentless hours have pushed

employees to the brink as they chase after CEO Kalyan
Krishnamurthy's audacious goals

25 Jan 2024 / 15 min read

Comment

Nuha is interested in the opportunities present at the intersection

of business and storytelling.

READ SUMMARY

At 11 am today, Flipkart’s employees will gather

for an all-hands meeting, and the buzz is likely
to be all about the imminent layoff, reportedly
set to trim 5–7% of the workforce.

But it isn’t anything like the e-commerce giant’s

almost-annual layoff routine, a senior category
manager told The Ken.

What’s turning heads, he said, is the absence of

chatter about it from Flipkart’s senior leaders.
Ordinarily, such news circulates internally, but
this time, employees got wind of it only through
the media grapevine.

The manager observed that there was no

mention of layoffs during a November 2023
meeting involving 80 employees in a specific
category. Without specifying, he disclosed that
the category head assured “no job cuts”.

But now, employees say, Flipkart is conducting

an annual performance review that will last
between January and March. And layoffs will
follow.

This is just a peek into the pressure-cooker

atmosphere at the company home to 22,000
employees (excluding fashion portal Myntra) as
the Walmart-owned e-tailer is struggling to
deliver on the expectations of Kalyan
Krishnamurthy, its chief executive of seven
years.

Flipkart’s growth across categories in 2023 was

20%, according to multiple category managers, a
far cry from the 40% target set by
Krishnamurthy.

So, the company is on a mission: boost growth,

gain market share, and turn a profit—all while
facing off against its e-commerce rivals, Meesho
and Amazon.

Flipkart’s top brass and senior category heads

recently convened for a meeting led by
Krishnamurthy to outline the roadmap for 2024,
The Ken has learnt. The meeting scheduled for
today (25 January) is to communicate these
goals.

In that session, Krishnamurthy rolled out an

agenda: introduce a loyalty programme for top
spenders, crank up incentives to ensure
customer loyalty, amp up transaction numbers
and average order sizes, and focus on brands.

While wrapping up, Krishnamurthy admitted to

the hurdles Flipkart faced in multiple categories
during the latter half of 2023, The Ken has learnt.
Yet, he declared his intent to make a “comeback”,
steering the company towards profitability and a
much-awaited initial public offering (IPO).

SEE MORE VISUAL STORIES

But it is these IPO expectations that are

reshaping Flipkart’s culture, once known for
autonomy and a fail-fast mindset, to a more
corporate one. Until recently, Krishnamurthy
oversaw a structure with as many as 11
hierarchical layers. It was only last June that it
was reduced to eight.

Mid and senior staffers have endured a two-year

drought without salary hikes, said multiple
employees. A senior manager, while recalling the
last raise in mid-2022, underscored the anomaly
by pointing out that there were times when the
company handed out raises not once or twice,
but even three times a year.

Flipkart did not respond to The Ken’s detailed

questionnaire. However, over 25 current and
former mid- to senior-level employees across
diverse categories, including fashion, electronics,
mobile, marketplace, tech, product, and business
development, vividly painted the picture of a
workplace in turmoil. They haven’t been named
as they are not allowed to speak about the
company publicly.

The road for Flipkart’s fairytale to reach a happy

ending (read: IPO) is bumpy—especially as its
employees in one category that perhaps matters
the most are feeling anything but thrilled.

Great expectations
The pressure is palpable among Flipkart’s
employees in the fashion vertical.

And it has to do with the remarkable leap in the

category—covering everything from casual and
western wear to ethnic clothing, kids’ apparel,
footwear, accessories, and more—following the
pandemic.

For instance, Meesho’s sales revenue in the year

ended March 2021 increased by 158%. Flipkart
Fashion’s sales-revenue figure also jumped
during that period, per multiple people in the
lifestyle team, with one manager stating it was
nearly 150% of what the category generated in
2019-20.

There was a pivotal change in terms of

strategy in late 2020 to go after tier-2
and -3 and position ourselves head-on
with Meesho
MANAGER, FLIPKART

Fashion—alongside mobiles—stands out as one

of Flipkart’s most important categories. In 2023,
the gross merchandise value (GMV) for fashion
was around Rs 25,000 crore (US$3 billion), while
for handsets, it was in the Rs 40,000–45,000
crore (US$4.8–5.4 billion) range, according to
two senior category managers.

These two, they said, account for over 50% of the

company’s total GMV. But that’s not enough for
Flipkart.

“We (fashion) aim for a minimum of 30%

(yearly) growth. In 2023, it fell short, and we
could only manage 18%,” said a senior category
manager.

Lifestyle is important because it contributes to

the bottom line, said a former head of the
category who quit in the past couple of months.
“(Fashion’s) contribution margin is positive,
whereas electronics and mobile do not
contribute to the bottom line,” they added.

Mobile is a negative category because

of the pricing, but it gives the highest
top line and visibility. In Big Billion Days
sale, it’s the mobiles category that gives
Flipkart the most sales
FORMER CATEGORY MANAGER, FLIPKART

Walmart, when it acquired a controlling stake in

Flipkart in 2018 for US$16 billion, fuelled this
transition. “They came from a retail mindset of
fashion being a margin driver. Their expectation
from both Myntra and Flipkart Fashion was of
margin delivery rather than growth,” said
another senior category manager.

It also reflects in the staff strength: fashion’s

team size is 250 while mobile has 80-90
employees.

While fashion may be a small business in terms

of product value, it is the second largest in terms
of units sold. Many employees affirmed its role
as a key driver for customer acquisition.

Even when Flipkart bets on other categories,

fashion remains its winning hand. For every Rs
10 (US$0.12) spent on other verticals, fashion
brings back Rs 3 (US$0.03) because there is
minimal burn, explained a category manager.

Despite high hopes, the winning streak didn’t

continue until 2023—mainly because fashion’s
2022 boom was unexpected. The above-quoted
former category manager attributed the surge to
pent-up demand and “revenge shopping”,
resulting in a 50–60% increase in sales.
“(Flipkart) thought this trajectory would just go
on forever.”

It didn’t. Then, it was on the employees to bring

it back on course. And they began seeing a target
creep.

Meet targets or check out

“I handled the mobile category. There was no
revenue target until June 2022, and I achieved
around Rs 5–6 lakh (US$6,000–7,200) per
month on average. In July [same year], I was
suddenly assigned a Rs 30-lakh (US$36,000)
target and could meet (only) half of it,” said a
former senior manager who recently left Flipkart
after six years. Over a dozen more employees
echoed concerns about increased targets and the
resulting pressure.

“I remember we were running at 19–20% annual

growth, and Krishnamurthy wanted to [end] July
2023 at 40% growth,” said a former associate
director. “That number was practically
impossible unless you somehow pumped in Rs
50 crore (US$6 million) in 10 days.”

In the entertainment category, too, after a 5–6%

compounded annual growth rate for five years,
the team was tasked with a 10% growth target
last year, reported another manager. “We could
achieve 7%.”

This target-driven mindset is a culture built by

Krishnamurthy.

If a target is 100% achievable, it's not a

target. There is always a decent amount
of stretch in any target given to anyone
SECOND FORMER CATEGORY MANAGER, FLIPKART

“Whenever we heard him in town halls, he was

very clear on what he’s going after, be it market
share, profitability, or some other metric,” said a
former business manager while underlining
Krishnamurthy’s knack for honing in on the
metrics that matter.

A former business manager, while agreeing that

Krishnamurthy is a “ruthless executor” who
wants work done “yesterday”, said the CEO is
not unreasonable. “It’s just that a lot of things
have to come together to make those targets
achievable.”

But things don’t come together so easily—unless

someone keeps track. A category manager
pointed out that they were part of 300 active
Whatsapp groups (50 just in the lifestyle
category) to share timely updates.

The workplace now exudes a sombre vibe.

For instance, the once-interactive town halls

have turned into leadership monologues. Pre-
pandemic meetings were “less presentations,
more verbal conversations,” shared a senior
category manager. Now, it was all about putting
numbers on slides.

Unwilling to “adopt this culture”, one of the

above-quoted category managers quit. “I am not
someone who can use people as tissue paper.
Even if it’s a strategic decision, I cannot ask
people under me to build a Rs 2-lakh (US$2,400)
business in a day, and that too without proper
training.”

SEE MORE VISUAL STORIES

Teams had now started seeing a revolving door

of members, with some leaders being shuffled
every 1–1.5 years.

Krishnamurthy engages with business unit

heads every week, typically on Tuesdays, and
holds quarterly meetings with category team
managers.

“Everybody says he is not happy and trying to

push targets. At one point in time, we were only
preparing for reviews throughout the week,”
recounted one category manager. In these “drill
sessions”, the questions were relentless: “Why
isn’t the business growing?” and “How do you
plan to fix it?”

You had to be armed with all the answers, or else

you may be replaced.

Sandeep Karwa—the head of fashion for two

years—was superseded by Arief Mohammed in
November 2023, according to multiple Flipkart
employees. In June of that year, Smrithi
Ravichandran transitioned from heading grocery
for two years to mobiles, and Hari Kumar G
assumed control of the grocery category. Four
months before that, Jagjeet Harode and Rakesh
Krishnan traded places in the marketplace and
electronics categories after three- and four-year
stints, respectively.

These shake-ups were a result of intense team

review sessions, which were more about
showcasing Krishnamurthy’s discontent,
according to multiple employees.

Karwa was moved to a different position

following the failure to achieve the 40% growth
target, as reported by several employees. Fueled
by a noticeable sense of urgency, he addressed a
crowded room of 100 employees from the
lifestyle team before the October 2023 Big Billion
Days sale, declaring, “We have tried a number of
things (for growth), but nothing is working. We
will continue to experiment and everyone has to
be on board.”

He is said to have gone on a sabbatical post the

transition.

One for the team // In the lifestyle category, four

directors—Aakriti Agarwal, Manish Sharma,
Sumit Bansal, and Shiveta Bhan—are currently
either transitioning out or seeking new roles

Meanwhile, since February 2021, work hours at

Flipkart have stretched. Employees now stay at
work until their bosses call it a day. Pre-
pandemic, the norm was to leave by 7 pm, but
post-2021, it has stretched to 9 or 10 pm, shared
by several present and past employees.

“We used to joke that there are only two kinds of

people in Flipkart: those who are either
unmarried or have no plans to marry and those
who are divorced,” remarked a senior category
manager from the marketplace team.

In 2023, the fashion, tech, and product teams,

particularly in the category department,
experienced the highest attrition rates.

“It’s not a Karan Johar [popular Hindi film

director] film where Jaya Bachchan [Hindi film
actor] welcomes you when you arrive at work,”
quipped a senior director who has worked
across several e-commerce platforms. “It’s the
largest e-commerce company in India. What
were employees expecting?”

How long until the parental promo

expires?
Flipkart may be the e-commerce giant in India,
but its parent—that owns over 80% stake—is
calling all the shots.

Now, the global behemoth Walmart, which has

been pumping money into Flipkart for six years,
wants to see results in the form of profitability,
according to multiple senior executives in the
know.

“Flipkart requires an additional billion [in

funding] every year from Walmart just to sustain
the business,” said a former product manager,
adding that its burn rate stood close to US$1.5
billion in 2023.

The e-commerce giant is in the middle of raising

US$1 billion, with Walmart reportedly on board
to infuse US$600 million.

But even Walmart’s support will come with an

expiry date. That’s why Flipkart needs to go
public soon.

“With the kind of burn rate Flipkart has, it will

need money from Walmart for a while. That’s
why the IPO is getting postponed. Profitability is
nowhere close to what they wanted,” said a
former business finance manager who left the
company post the pandemic.

Despite the pandemic propelling Flipkart’s

success, the promised public listing remains a
distant prospect.

Two employees were brought in to steer the

company in the direction of an IPO. One was
hired in 2012 to establish a strong financial
control and reporting team and another in 2014
as an assistant manager dedicated to planning
the IPO. Both left post-pandemic.

“We were told in 2021 that the IPO would

happen in the next 18–24 months, but even that
has passed,” said a senior category manager.
Multiple employees believe that even 2025 is an
ambitious timeline for the IPO.

With Flipkart’s scale of business, it

can't hit profitability in a year or two. If
Walmart doesn't support through this
period, it will have more to lose than
gain
FORMER BUSINESS FINANCE MANAGER, FLIPKART

That’s why Flipkart now repeatedly touts its

ABCs (Audacity, Bias for Action, and Customer-
first) in meetings not just as goals but also to
push employees to be responsible for growth.

In the glory days of 2019, Flipkart was the dream

workplace, as noted by a former category
manager. “Now, a war is brewing. They say
everything is fair in love and war. When you go
into war, you only come back after winning it.”

Edited by Sumit Chakraborty

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CREDITS

Written by Nuha Bubere

Edited by Sumit Chakraborty

TOPICS

AMAZON CULTURE E-COMMERCE EMPLOYEES FLIPKART

GROWTH IPO LAYOFFS MEESHO MYNTRA

PROFITABILITY WALMART WORKPLACE

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NUHA BUBERE

Inside Flipkart: a high-

pressure workplace thanks
to its IPO dreams. And
Walmart
The absence of salary hikes and relentless hours have
pushed employees to the brink as they chase after CEO
Kalyan Krishnamurthy's audacious goals

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