Online fashion retailer Jabong is expected to lay off 40-50% of its 400 people strong workforce in Gurugram as part of a restructuring at Flipkart, as per an ET report.
The development comes as US retail giant Walmart, which owns a majority stake in Flipkart, is looking to drive more synergies between Myntra and Jabong with that of Flipkart’s fashion business. The two entities have been brought under the control of Flipkart CEO Kalyan Krishnamurthy following the somewhat unexpected exit of co-founder Binny Bansal this week.
Bansal announced his resignation effective immediately, following an investigation into an allegation of 'serious personal misconduct'.
Meanwhile, as per the report, Flipkart Fashion and Myntra will continue to be run independently, though it is not clear how much focus will remain on Jabong and its future. With the restructuring at Jabong, it is expected all operations including technology and corporate functions like HR and finance will get combined with those of Myntra’s. It is also being speculated that Jabong is also likely to move base to Bengaluru from Gurugram.
There is also speculation about Myntra-Jabong CEO Ananth Narayanan leaving the company. More senior exits may be in the offing as per the report. As per the report, Myntra-Jabong’s chief financial officer Dipanjan Roy has also stepped down.
Myntra’s below-par performance this year could is also being cited as a reason to push the company towards an integration with Flipkart. Myntra is said to have has missed its revenue target for 2018, with Jabong contributing majorly to the shortfall.
The restructuring is likely to streamline costs and operations with greater synergies at the three platforms. However, with Binny Bansal’s exit, and speculations of even more Flipkart executives leaving the company doing the rounds, it will be sometime before things settle down at the ecommerce company.