JioMart, the online wholesale platform owned by Reliance Industries and led by Mukesh Ambani, has initiated a significant round of layoffs, affecting over 1,000 employees, as per reports. The aim behind these layoffs is to streamline operations following the recent acquisition of Metro Cash and Carry. The Economic Times, citing insider sources, reveals that this workforce reduction is part of a larger plan to downsize the wholesale division, which currently employs 15,000 people, by two-thirds. In recent days, the company has requested the resignations of 1,000 individuals, including 500 executives from its corporate office.
Additionally, JioMart intends to lay off more employees, with several hundred already placed on a performance improvement plan (PIP). The remaining sales staff will transition to a variable pay structure after the company lowered their fixed salaries. The sources explain that the acquisition of Metro Cash and Carry resulted in role overlaps, prompting these measures. JioMart, known for initiating a price war in the grocery B2B sector, is striving to enhance profit margins and reduce losses.
Furthermore, JioMart plans to close down over half of its 150 fulfillment centers responsible for supplying groceries and general merchandise to local stores.
The acquisition of Metro Cash and Carry by Reliance Retail Ventures was approved by the Competition Commission of India. The deal, finalized in December 2022 for a cash consideration of Rs 2,850 crore, allows Reliance Retail to leverage Metro’s stores in various cities across India. JPMorgan analysts have noted that Metro’s assets can bolster Reliance’s B2B offerings, granting access to a large customer base of registered Kiranas (mom-and-pop stores) and other institutional customers, as well as a robust supplier network.
