Jabong and Myntra have been synonymous to online fashion over the past few years. And it would be no exaggeration to say that if someone is not aware of the two, he has been living under a rock! But the sad news is that Jabong is going to shut down, owing to non-satisfactory sales this year.
As per the reports, the online fashion retailer has decided to lay off 200-250 employees in a major restructuring exercise. This came soon after the resignation of the head of Flipkart Group Binny Bansal.
When it all happened?
In a townhall that lasted about 10 minutes on Friday, Myntra and Jabong chief Ananth Narayanan told employees that letters pertaining to the layoffs will be given shortly. The Jabong site will continue to run, but the traffic from the website will be directed to Myntra, after the merger with Myntra is completed, a source reported.
jabong myntra Merger & its Terms:
”Myntra and Jabong will now fully integrate all the remaining functions including technology, marketing, category, revenue, finance, and creative teams. The closer integration of Myntra and Jabong is a necessary step in our continuing development.
To remain the leader in fashion e-commerce in India, we have to find ways to operate more effectively and innovate more quickly. By better aligning our resources with our long-term plans, we can put the best structure in place to serve our sellers and brand partners and ultimately benefit our customers,” a company spokesperson said.
It has been decided that the operations will now be consolidated in Bengaluru. A list of people who will be fired and those who will be transferred has been shared with the respective teams, sources said.
What about the Employees?
The employees who don’t get the option to join in Bengaluru will be offered three months’ pay as severance. They will also be served 15 days of pay for every year served, besides gratuity.
Flipkart has three subsidiary brands under it — Flipkart Fashion, Myntra, and Jabong. Myntra and Jabong together have been asked to move all operations to Bengaluru and reduce the workforce.
There is no clarity on what happens to the Jabong brand after this consolidation exercise. Walmart, the US retail giant, which completed its $16 billion purchase of a majority stake in Flipkart Group in August, has already announced it will merge Myntra and Jabong into Flipkart.