Chatrooms have gone gaga recently related to the Flipkart recently following the finalisation of a multi-billion dollar deal with America’s Walmart with the e-com giant. The fact that employees’ stock options will go up in value, in sync with the mega deal, has only added an extra zing around the campus.
Unlike in the case of many other mergers, the mood among the large amount of employees in the sprawling Flipkart campus is upbeat. The new campus at Bengaluru’s Embassy Tech Village modelled on Silicon Valley structures houses more than 7,000 employees, with hardly any room for fear of tomorrow. Several employees have said they were looking forward to working in a company controlled by the largest retailer of the world.
The Flipkart board last week gave its approval to Walmart’s proposal to acquire around 75% in the company for around $15 billion, sources said. The term sheet is expected to be signed in the next few days, giving a closure to the much talked about deal in the Indian e-commerce sector.
‘’Walmart will bring its years of experience to Flipkart and that will help us hone our skills and bring us closer to the global best practices,’’ said one of the techies at the campus.
The overall mood is quite positive and there’s buoyancy in the air, another employee said hurriedly before moving on to an important errand. Employees don’t anticipate major organisational changes or job losses after the closure of the deal, another Flipkart insider pointed out, of course on the condition of anonymity. In fact, according to some account, Flipkart staffers have been told to keep silent on the proposed deal, irrespective of whether they know much or not.
“People working in companies like Flipkart and Amazon want to work with newer technologies. With Walmart coming in, which has a history of being a product leader, there will be technological changes which will be beneficial for us,” said an engineering division employee.
“Right now, we are a manpower driven company. With Walmart coming in, we will hopefully become tech-driven. We will get to learn new things and we are excited about that,” another staff said.
Competition with Amazon too is playing on the minds of Flipkartians. ‘’Walmart could replicate supply chain and sourcing experience and that will help us compete with Amazon,’’ was one of the views at the campus spread across 830,000 sq ft. There’s also a strong hope for a better career growth once Walmart is part of Flipkart. ‘’This will expose us to world class technologies and business practices, and help in our career growth apart from growth of the company.’’
An employee of Jabong, which is part of the Flipkart trinity, said the deal would give a solid financial backing to the Bengaluru-based company. “As the company is expected to work lean and grow at a tremendous pace with the same internal leadership, the culture will not change drastically,” she stated.
Many employees, especially those in the mid to senior level positions, said they would be able to vest the stock options at a much higher valuation now than even a year ago. When Flipkart raised $2.5 billion from SoftBank last year, its valuation was marked down to $12 billion from a peak of $15 billion, leaving them a little anxious until the company compensated their losses by issuing additional stocks. Now, with the valuation of an estimated $20 billion, it’s almost like a double bonanza for them. “I have been waiting for this for a long time. I had only part vested my stocks but most of my options still remain with me,” said a former employee.
Senior employees at Myntra, which is also a part of Flipkart, are also looking to vest their shares. The stock options given to Flipkart employees usually have a vesting period of four years.
“The strength of the company is the speed with which we work and the quick decision-making. I do not think there will be much changes in the start-up set up because if it takes up a corporate structure, it will be difficult to do the same,” said a hesitant member. The company has not sent out any official communication to the employees regarding the deal yet. As for now, employees are gearing up for the upcoming Big Shopping Days Sale beginning on May 13. One of them said, ‘’we have no time to talk about Walmart now,’’ and then added a few top-level management changes were likely. When Amazon came to the deal table to bid for Flipkart, there were fears of job losses due to duplication of roles in case of a merger. However with Walmart back in the saddle, those fears have faded.
Source: Business Standard