The employees of Myntra as well as Flipkart will be getting cash payouts of $700 million, reported CNBCTV18. The cash payout is a means to compensate the current as well as the former employees for the loss in share value that happened due to separation of Flipkart and payment platform PhonePe which was its subsidiary.
Walmart which acquired a major stake of Flipkart in 2018 is responsible to facilitate the payout. According to the report, the Human Resources department of the company has already communicated with the employees of Flipkart and Myntra through e-mails about the matter. Sources have reported that e-commerce company Flipkart has a workforce of 15,000 employees while fashion e-commerce Myntra has a workforce of 2500-3500 employees. The cash payout is expected to be the last buyback programme by Flipkart ahead of its much-anticipated initial public offering (IPO) in 2023.
For those who are unknown, Flipkart had acquired PhonePe for a value of $20 million in 2016. PhonePe continued to be the subsidiary of Flipkart till December last year. However, both the firms announced their separation later. However, Walmart still continues to be the parent company of both Flipkart as well as PhonePe. The major shareholder in both companies happens to be Walmart.
“As part of this transaction, existing Flipkart Singapore and PhonePe Singapore shareholders, led by Walmart, have purchased shares directly in PhonePe India. This completes the move to make PhonePe a fully India domiciled company, a process that started earlier this year. Walmart will remain the majority shareholder of both business groups”, said Flipkart as well as PhonePe in a joint statement.