Campus job fiascos highlight e-commerce sector's messy state

The failure of e-commerce majors like Flipkart and Grofers to take in the recruits hired through campus placements has not only exposed the cash-crunch situation of the players in the sector but has also been a learning experience for engineering and management colleges and graduates.

Suchita Dutta, executive director, Indian Staffing Federation (ISF), said the inability of these e-commerce companies to meet their contractual commitment to campus recruits was an outcome of the volatility in the industry.

According to her, any new industry takes time to stabilise and settle. And that's what is happening with the e-commerce sector at the moment.

In almost back-to-back episodes, Flipkart and Grofers, which have undergone business rejig, found it difficult to absorb fresh graduates they recruited on campus.

First, e-marketplace Flipkart postponed the joining dates of campus hires from Indian Institute of Management (IIM) – Ahmedabad and Indian Institute of Technology (IITs), citing business restructuring. About a month later, Gurgaon-based Grofers cancelled over 60 job offers saying those positions had become redundant after it undertook a downsizing exercise.

These two incidences have shaken the placement cells of the colleges. For Dr Ravishankar B V, associate dean (placement), BMC College of Engineering, Bangalore, the Grofers experience is an eye-opener.

"We've never had a single issue like this before. Next year, we will be very careful to place such companies on lower priority. We will take all the necessary steps and will keep such companies at bay. We will tell the company to be careful and not trouble the students," he said.

Even as he termed it "very unfortunate and undesirable", Dr Ravishankar said since it was a business decision, there was little scope to influence it.

"(I'm) trying my best to see that students are placed in some companies. Today, one company came for interviews. IBM will be coming next. We will be talking to other companies too," he said.

Dr Ravishankar had advised Grofers to take the students on internship and pay them stipend till it revived its business or graduates got a job elsewhere. However, the grocery e-tailer was constrained by altered business environment.

Girish, a placement officer at Bangalore Institute of Technology (BIT), said he was relaxing some rules of recruitment for students turned away by Grofers.

"This kind of incident has happened for the first time. We are trying to help the students whose jobs have been revoked. We are looking at allowing them (students) to take part in the current off-campus recruitment process," he said.

One of the reasons most institutes have not taken any harsh action against the e-grocery firm is because it was in the midst of downsizing when the second batch of graduates came up for being put on the company roll.

Of the 134 campus hires, the company had already taken on board around 60 graduates in the first batch some time back.

Prashant Verma, assistant vice-president for marketing at Grofers, said the decision to turn away campus recruits was not easy. "It was a tough call for us. We could not have taken fresh management graduates when we were letting go the old employees. We regret it but we had to take the call," he said.

Owing to the changed business projections, Grofers was recently forced to lay off 10% of its existing employees. Early this year, the hyperlocal delivery firm shut down nine unviable centres to control excessive cash burn.

But Grofers is not the only one that has been compelled to relook at its business strategy. Its rival PepperTap had to down shutters early this year due to fund crunch while e-grocery ventures of Flipkart and cab-aggregation firm Ola were wrapped up within a few months of their launch.

Meanwhile, Askme Grocery, a brand under Getit Infoservices, is scouting for new investors after the exit of Astro Overseas Ltd. It has also retrenched employees to cut losses.

Of the 60-odd grocery e-tailers, which had appeared on the scene in the last few years, only a handful of them like Big Basket, Nature's Basket, ZopNow and a few others are left.

ISF's Dutta said what is happening in the e-commerce sector is partly a result of global slowdown. She said to avoid any pitfalls, fresh graduates and educational institutes should do proper due diligence on a company before considering them.

"Both placement cells and individuals should be proactive and prudent in their approach while accepting a company's job offer. They must do proper due diligence and reality check on which direction the company was headed in. It is not advisable to wait it out even after you have got a job," she said.

She said the period between the time a fresh graduate is hired at a campus and when he actually came on the rolls of a company is generally two quarters. This, she said, is a long time, and fraught with the hazard of business and market projections going awry, specifically for e-commerce firms.