Flipkart converts pay hikes
annual increments nor merit-based payouts. But unlike last year, senior employees such as those at the levels of vice president and senior vice president will also receive bonuses, the company has said.
Employees being promoted, acrosslevels,willenjoyallthree— pay increases reflecting in their overall salary structure, meritbasedpayouts,aswellasbonuses.
These changes come on the back of Flipkart’s attempts to contain attrition rates. This, however, is not specific to Flipkart as the broader startup ecosystem has struggled through similar patterns, undergoing a vigorous talent hunt, especially at senior levels.
As for employees, those who were paid handsome salaries during the pandemic rush for hiring at tech-led companies are now struggling to sustain their pay cheques after funding dried up and startups became focused on conducting their operations more efficiently.
Mint could not immediately quantify Flipkart’s attrition rate.
Kalyan Krishnamurthy, Flipkart’s chief executive officer, issued a communication to the company’s more than 20,000 employees on Thursday detailingthenewcompensationstructure. Flipkart recently has had a spate of layoffs, and these measures, according to company executives, are expected to help itretainemployeesacrosslevels.
“Instead of usual compensationincreases,wewillbedelivering merit-linked payouts to all eligible employees, in Grade 12 and below. These merit list payouts shall be made as two lump sumpaymentsinAprilandOctoneither ber this year, and equivalent, in value to the merit increase that would have typically been paid throughtheyear,”Krishnamurthysaidinhisletteraddressedto Flipkart’s employees. Grade 12 and below refers to Flipkart’s juniorandmiddlemanagement employees. For employees in othergrades,thecompanysaidit has enabled wider spread of ESOP (employee stock ownership plan) allocation to “drive wealth creation”. The company has a total of 16 grades.
A spokesperson for Flipkart confirmed the development, which Mint reported first. “We are providing compensation increases to employees getting promoted, merit-linked payments, and bonus payouts. Additionally, our stock option allocation exercise will continue as is for those who are eligible,” the spokesperson said.
In FY23, Flipkart spent ₹4,482 crore on employee benefit expenses, up from ₹3,735 crore a year earlier. Meanwhile, its total expenses grew 26% on-year to ₹19,043 crore.