Indian retail giant Reliance JioMart has begun its layoff plan, which is expected to last several weeks and affect 10,000 employees.
Reliance Retail’s versatile online shopping platform JioMart recently… started massive layoffs, which may affect 10,000 workers. Reports this week said that JioMart has already laid off 1,000 employees, with 9,000 more jobs to be cut in the coming weeks. The Indian retail giant opted for this massive cut to improve its margins amid a contracting economy.
JioMart is also planning to close more than 50% of its fulfillment centers to improve its profit outlook. These centers house the e-commerce company’s products (including preparation and storage), from where they are distributed to local stores.
Another reason for closing more than half of its fulfillment centers is to better absorb the impact of the recently concluded Reliance Retail acquisition. Less than two weeks ago, the Indian retail giant acquired the local branch of German retailer Metro AG. The deal cost Reliance $344 million, and it is widely believed that the company may recoup some of this money by closing several fulfillment centers. As it stands, over 150 JioMart fulfillment centers supply goods to neighboring stores. Therefore, reducing the operational costs required for these centers will ease some of the financial strain as Reliance seeks profitability.
Retrenchment estimates increase in company’s potential income
JioMart’s primary focus is improving its bottom line, and there’s no doubt about the Indian e-commerce giant’s latest grim approach. The change in workforce follows the Navi Mumbai-based company’s aggressive pricing strategy, which prompted supply disruptions.
Executives with inside knowledge of the JioMart downsizing situation explained how the company is looking to reduce its 15,000-employee headcount. According to these inside sources:
“The company has asked over 1,000 people on the ground, including 500 executives at its corporate office, to resign in the past few days. This is another major round of layoffs with hundreds of employees already on a performance improvement plan (PIP) is planning.
Furthermore, a source revealed how the downsizing affects the employees who manage to dodge the bullet. As the official said:
After reducing the fixed pay salary of Reliance, the remaining sales employees have been placed on variable pay structure.
With the latest JioMart layoffs, Reliance seeks to be better positioned to meet the challenges in the Indian retail sector. Beyond that, the company plans to maximize the opportunities it offers as its strategy unfolds. However, despite its self-service goals, Reliance JioMart insists that it is necessary to keep customers happy while it adapts to the changes. The company suggested that a larger content subscriber base would remain its ultimate agenda.
Reliance JioMart as an Indian retail industry leader
Amidst the evolution of the Indian retail space, JioMart has emerged to assume a leading position and play an important role. The company is a joint venture between Reliance Retail and JioMart and initially focused on selling groceries online. However, over time, JioMart expanded into other product categories, including household essentials, fashion and lifestyle products.
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Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to strip crypto stories down to the basics so that anyone anywhere can understand without a lot of background knowledge. When he is not delving deep into crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
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