Some of the employees of Walmart in India who were recently laid off have now taken the matter to Walmartâ€™s headquarters in the US alleging that they had been wrongly targeted for removal, as per an Economic Times report. The US giant had taken a policy decision to downsize its wholesale business in the country and merge some of its activities with Flipkart.
The decision included stopping further expansion of the cash & carry stores beyond the ones in operation. Following these decisions and the move to shut down the largest fulfilment centre in Mumbai, around 100 employees had been reportedly relieved of their duties though the company put this figure at 56.
Now, the complaint by some of the sacked employees is that they were expressly assured in December 2019 that they wonâ€™t lose their jobs. More importantly, they have come out and said there were real estate deals concluded recently in which there were irregularities and some of them were to turn whistleblowers. They allege that they have been targeted due to this reason.
It is learnt from these aggrieved former employees at Walmart India that the US company has responded to their mails and they expect the officials from the parent company to visit India to conduct an investigation. These will be from the compliance and ethics department in the US.
Walmart US has not directly responded to this report but given a general reply that the company believes in following the best ethical practices and any complaint received will be thoroughly investigated.
The company has been reviewing its business operations in India even since it spent $16 billion to acquire close to 80% stake in Flipkart in 2018. The Indian operations have been a drag on its global balance sheet. The move by Flipkart to enter the food retail business in a big way has come quite handy for the US giant to make these current decisions at restructuring its wholesale cash & carry business in the country which it had entered way back in 2007.
With the current FDI policy allowing 100% retail in the food business, Walmart can integrate many of its functions with Flipkart and cut down on fixed costs. Flipkart FarmerMart is the entity that will now handle the purchase and sale of fresh foods and groceries. There will be plans to move offline also later making it an omni channel business. Flipkart and Walmart will have to ensure that the food retail business is carried on as a separate business entity and with no direct truck with the retail online marketplace.