All out of a sudden, Flipkart has turned into a hornet’s nest. Just after the resignation of Binny Bansal over sexual assault allegation, media reports surface about Ananth Narayanan (CEO) and Dipanjan Basu (CFO) resigning from Myntra owing to differences with Flipkart’s rejigged leadership.
However, soon Narayanan refuted reports of his movement and said he will continue leading the Flipkart-owned fashion firm. Within hours of his interview with Reuters, Flipkart has announced that Myntra is integrating Jabong across all functions.
Following the integration, Jabong is also slated to layoff about 50 per cent of the existing workforce of 400 people. Importantly, Flipkart won’t kill the brand – Jabong and also let Myntra to operate independently as in the past.
Unlike Myntra that has been growing fast, Jabong is struggling to scale in terms of sale.
As of now, Jabong was based out of Gurugram but now remaining employees (after downsizing) are likely to move to Bengaluru. The integration would allow Walmart to cut losses and consolidate experience.
Flipkart has acquired Jabong from Global Fashion Group in a fire sale worth $70 million in 2016. Since then, the company has been running independently. Flipkart along with Myntra and Jabong together hold about 70 per cent market share in online fashion.
Also read: Binny Bansal resigned as Group CEO over sexual assault claim: Why is he still on Flipkart’s board?
Besides layoffs at Jabong, the integration would also trigger movement of a significant chunk of employees from Myntra. According to an ET report, rivals of the largest fashion major are flooded with CVs of its employees.