In an email to IIM-Ahmedabad sent on Wednesday, Flipkart wrote that it is in the middle of a restructuring exercise which must be completed before student hires can be accommodated. "This was a difficult decision for us to arrive at and we feel the disappointment of students. At the same time, it is important for us to land our campus hires into Flipkart at the right time and into meaningful roles which gives them opportunity to learn and grow," the email said.
IIM-Ahmedabad had written this week to Flipkart top boss Binny Bansal, asking that the company honour its commitment and start paying the students it has recruited from June, partly because they have loans to pay. Flipkart has rejected that, but says the students will get a Rs. 1.5 lakh bonus when they do start work.
"You would agree that this is not the first time that campuses have faced such a situation. We all live in a dynamic and evolving business environment that is changing rapidly," the company said to the business school.
Fierce competition to win customers through deep discounting has led to mounting losses for Flipkart along with rivals Snapdeal and Amazon. Industry insiders say funding is also becoming harder to come by. The cash burn has led to sliding valuation from analysts at HSBC, Morgan Stanley ,and reportedly, some of Flipkart's own funders.