Flipkart adopts centralised procurement, merges departments to cut costs

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The Indian e-commerce giant Flipkart is looking forward to cutting costs by as much as 30%, and this is being done by centralising purchases and merging departments, while keeping hiring to a minimum level.

It’s been years that the company has been in business and burning cash to woo customers; now, the focus seems to be on profit-making.

As per ET sources, one such merged department would include the engineering departments of logistics arm Ekart and the advertising and ecommerce units. Other than this, independent categories like large and small appliances, furniture, home decor, kitchen and furnishing will also be merged.

These merged departments would have one defined team for sales and marketing, thus keeping new hiring at bay.

Talking of centralising product procurement, the management is assuming that the centralised unit will take better decisions when it comes to dealing with vendors.

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