JioMart fires 1,000 staffers in Reliance’s B2B consolidation drive; more to come: Report

Reliance Industries has reportedly started laying off employees as it consolidates its B2B vertical following the acquisition of Metro Cash and Carry. According to an Economic Times report, the Mukesh Ambani-helmed company has laid off over 1,000 employees at its online wholesale platform JioMart.

And there’s more to come. ET cited three sources as saying the plan is to reduce the “15,000-strong workforce in the wholesale division by two-thirds”. That would essentially mean 9,000 more layoffs in the near future.

Acquisition effect

Many had seen the layoffs coming, as the acquisition of Metro Cash and Carry, which was completed in March, led to almost 3,500 additions to the Reliance wholesale workforce, many of them in overlapping roles. Those who have been asked to leave are reportedly mostly from the sales team.

Also read: After cola giants, Reliance takes on FMCG biggies with cheaper soaps, detergents

Also, after the Rs 2,850-crore acquisition, Reliance has reportedly shut down some of its warehouses to avoid overlap. JioMart is also reportedly planning to shut more than half of its 150 fulfilment centres that supply goods to the local neighbourhood stores. Hence, these layoffs can be seen as part of a larger consolidation and cost-cutting initiative.

At the same time, Reliance Retail has launched a price war in the grocery B2B space with hefty discounts. Last year, Reliance announced its entry into the FMCG market. One of the major steps was to relaunch Campa Cola after acquiring it from Pure Drinks.

Axe on sales teams

A source told ET that Reliance has asked 1,000 people, including 500 executives at its corporate office, to resign in the past few days. For the rest of the sales employees, the company has reportedly lowered their fixed salary and have put them on a variable pay structure.

Hundreds of employees have also reportedly been put on a performance improvement plan (PIP) and workers in other divisions may also be handed pink slips. According to reports, layoffs may be done across Reliance’s retail business, which has a 400,000-strong workforce.

Also read: Reliance Retail enters JV with Haryana firm Circle E for toy manufacturing: Report

Reliance’s B2B footprint

According to a JPMorgan analysis, Metro’s assets could further strengthen Reliance’s B2B business. RIL will gain access to a large base of registered kirana shops and other institutional customers, and a strong supplier network, among others, the report noted.

Metro Cash and Carry India reportedly serves over 3 million B2B customers in India, including 1 million frequent buyers, through its store network and eB2B services.

(With agency inputs)