Reliance Industries’ JioMart, led by Mukesh Ambani, is streamlining its operations with the recent acquisition of Metro Cash and Carry, resulting in the reported layoff of more than 1,000 employees in its B2B unit. According to sources cited in The Economic Times, this round of layoffs is part of a broader effort to reduce JioMart’s wholesale division workforce by two-thirds, from a total of 15,000 employees. Over the past few days, the company has asked approximately 1,000 individuals, including 500 executives at its corporate office, to resign.
In addition to the current layoffs, JioMart plans to further reduce its workforce, with hundreds of employees already placed on a performance improvement plan (PIP). Sales employees, on the other hand, have been transitioned to a variable pay structure following a decrease in their fixed pay salaries. These measures are being taken to address the overlapping roles resulting from the integration of Metro’s permanent workforce, consisting of 3,500 employees.
JioMart, known for initiating a price war in the grocery B2B sector, aims to enhance its margins and reduce losses. As part of this optimization process, the company plans to shut down more than half of its 150 fulfillment centers responsible for supplying groceries and general merchandise to local stores in the neighborhood.
The acquisition of Metro Cash and Carry by Reliance Retail Ventures has been approved by the Competition Commission of India. The deal, finalized in December 2022 for a cash consideration of Rs 2,850 crore, allows Reliance Retail to leverage Metro’s stores in various cities across India, including Amritsar, Ahmedabad, Bengaluru, Delhi, Ghaziabad, Guntur, Hyderabad, Hubballi, Indore, Lucknow, Kolkata, Mumbai, Nasik, Surat, Visakhapatnam, and Vijayawada.
JPMorgan’s analysis suggests that the acquisition of Metro’s assets will further enhance Reliance’s B2B offerings. According to JPMorgan analysts, “RIL’s acquisition would provide access to a large base of registered Kiranas and other institutional customers, as well as a strong supplier network.” Reliance Industries has long focused on the significant Kirana store ecosystem in India, and the integration of Metro’s wholesale business is seen as a positive step in this direction.