Mukesh Ambani-led JioMart Implements Strategic Overhaul, Over 1,000 Employees Laid Off
JioMart Implements Cost-Cutting Measures with Workforce Reductions
23 May 2023
JioMart, the online wholesale platform of Reliance Industries, has laid off over 1,000 employees as part of a cost-cutting initiative.
The layoffs aim to align JioMart's operations with the recently acquired Metro Cash and Carry and improve margins in the wholesale division.
JioMart plans to reduce its workforce by two-thirds and shut down more than half of its 150 fulfillment centers due to role overlaps and redundancies.
Mukesh Ambani's Reliance Industries is making headlines as its online wholesale platform, JioMart, undergoes significant changes. Reports suggest that the company has recently laid off over a thousand employees to align its operations with the newly acquired Metro Cash and Carry. These layoffs are part of a larger cost-cutting initiative aimed at streamlining JioMart's operations, improving margins, and reducing losses.
JioMart plans to reduce its 15,000-strong workforce in the wholesale division by two-thirds. According to insiders, the company has already requested over 1,000 employees, including 500 executives at its corporate office, to resign. Additionally, hundreds of employees are expected to be placed on a performance improvement plan (PIP). As part of the cost-cutting measures, the remaining sales employees have been shifted to a variable pay structure, reducing their fixed salaries.
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Following the acquisition of Metro Cash and Carry, JioMart faces the challenge of overlapping roles between the two entities. The addition of Metro's permanent workforce of 3,500 employees has led to redundancies in the backend and online sales operations. To address this, JioMart plans to shut down more than half of its 150 fulfillment centers that supply groceries and general merchandise to local neighborhood stores.
Reliance Retail Ventures' acquisition of Metro Cash and Carry was approved by the Competition Commission of India. The acquisition, valued at Rs 2,850 crore, provides Reliance Retail with access to Metro's stores in multiple cities across India. Analysts at JPMorgan believe that this acquisition will strengthen Reliance's business-to-business (B2B) offering, providing access to a large base of registered Kiranas and other institutional customers.
The layoffs at JioMart come at a time when several large companies in India, including Amazon India, have announced job cuts. The Indian e-commerce industry is witnessing intense competition, prompting companies to reassess their strategies to stay ahead. JioMart's cost-cutting measures and streamlining efforts reflect its commitment to optimizing operations and adapting to the evolving dynamics of the wholesale sector.