Reliance JioMart Cuts 1,000 Workers as Part of Broader Sustained Layoff Agenda

UTC by Tolu Ajiboye · 3 min read
Reliance JioMart Cuts 1,000 Workers as Part of Broader Sustained Layoff Agenda
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Indian retail giant Reliance JioMart has begun its layoff plan, which is expected to last several weeks and impact 10,000 employees. 

Reliance Retail’s versatile online shopping platform JioMart recently began a mass layoff, which could affect up to 10,000 workers. This week reports state that JioMart had already laid off 1,000 employees, with another 9,000 more job cuts to follow in the coming weeks. The Indian retail giant opted for this mass downsizing to better its margins amid a contracting economy.

JioMart also plans to shut down 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 over half its fulfillment centers is to better withstand the impact of a recently-concluded Reliance Retail acquisition. Less than two weeks ago, the Indian retail company wrapped up its acquisition of the local arm of German retailer Metro AG. The deal cost Reliance $344 million, and it is widely believed that the company could recoup some of this money by shuttering several fulfillment centers. As it stands, over 150 JioMart fulfillment centers supply goods to neighboring stores. Therefore, reducing the required operational costs for these centers would lessen some financial strain as Reliance seeks profitability.

Layoff Projected to Boost Company’s Earnings Potential

JioMart’s primary focus is improving its bottom line, and the Indian e-commerce giant’s latest grim approach leaves no doubt. The headcount shakeups follow the Navi Mumbai-based company’s aggressive pricing strategy, which induced supply disruptions.

Officials with inside knowledge of the JioMart downsizing situation touched on how the company seeks to slash 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 over the past few days. It also plans to have another large round of layoffs with hundreds of employees already put on a performance improvement plan (PIP).”

In addition, one source exposited how downsizing affects workers who manage to dodge the bullet. As the official put it:

“Rest of the sales employees have been put on variable pay structure after Reliance lowered their fixed pay salary.”

With the latest JioMart layoff, Reliance seeks a better position to withstand challenges within the Indian retail space. In addition, the company plans to maximize as many opportunities as it can as its strategy unfolds. However, despite its self-serving goals, Reliance JioMart stressed that keeping customers happy while adapting to changes is essential. The company suggested that a large content customer base remains its ultimate agenda.

Reliance JioMart as an Indian Retail Industry Leader

Amid the evolution of the Indian retail space, JioMart has emerged to assume a leading position and play a significant role. The company is a joint venture between Reliance Retail and JioMart and initially focused on online groceries sales. However, with time, JioMart expanded into other product categories, including home essentials, fashion, and lifestyle products.

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