What Led To Flipkart Layoffs? Around 500 Employees Asked To Leave After Annual Performance Review, Job Cuts Linked To ‘One-Star’ Ratings

Indian e-commerce giant Flipkart has reportedly asked around 400 to 500 employees to leave the company as part of its annual performance review process, according to multiple reports. The move has affected roughly 3-4% of the company’s workforce, which is higher than the usual number of employees that exit during this yearly exercise.

The layoffs are said to be linked to the company’s internal performance evaluation system. Every year, Flipkart conducts detailed reviews to assess how employees have performed during the year. Those who receive the lowest ratings are sometimes placed on what is called a Performance Improvement Plan (PIP). According to people familiar with the matter, a larger number of workers than usual were placed on this plan in the latest review cycle.

Performance Review Behind Job Cuts At Flipkart

Reports say that many employees who were asked to leave had received a “one-star” rating, which is the lowest possible score in the company’s performance evaluation system. Normally, about 1-2% of the lowest performers leave the organisation each year. However, this time the number is higher, leading to the exit of nearly 500 workers.

People familiar with the situation said the company’s decision was purely linked to performance assessments rather than a wider economic crisis.

Flipkart Says Process Is Routine

Responding to reports about the job cuts, a spokesperson for Flipkart confirmed that the process is part of the company’s regular review system. “Flipkart conducts regular performance reviews aligned with clearly defined expectations. As part of this process, a small percentage of employees may transition from the organisation. We are supporting affected employees with transition support,” the company said in a statement.

The development comes at an important time for the company. Flipkart, which is led by CEO Kalyan Krishnamurthy and backed by US retail giant Walmart is preparing for a possible initial public offering (IPO) in the coming years. 

Slower Growth In Competitive Market

In recent months, Flipkart has also made several senior-level appointments. These include Somnath Das as Vice President for supply chain, Digbijay Mishra as Vice President for corporate communications, Vipin Kapooria as Vice President for business finance, Yogita Shanbhag as Vice President for human resources, and Amer Hussain as Vice President for supply chain in its grocery and quick-commerce operations.

The layoffs also come as the company faces a more competitive market and shifting growth trends in India’s e-commerce sector. Flipkart’s marketplace arm reported revenue of Rs 20,493 crore in FY25, showing a 14% year-on-year increase. The company’s losses fell 37% to Rs 1,494 crore. However, the growth rate has slowed compared to the 21% expansion recorded in 2024.

Also Read: Petrol, Diesel Prices Today, March 7: Check City-Wise Rates In Delhi, Mumbai, Bengaluru And Other Major Indian Cities