Angry IIM Ahmedabad turns down Flipkart offer of petty compensation; company delays joining by 6 months

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MBAUniverse.com News Desk |
May 26, 2016
Flipkart has invited wrath of IIM Ahmedabad as the e-commerce giant is delaying the date of joining of the candidates it has recruited in campus placement 2016 at IIM Ahmedabad by 6 months
Future engagement of Flipkart with B school campuses is bound to get affected as a relationship based on mistrust and lack of transparency can never be mutually beneficial IIM Ahmedabad

One of the key MBA recruiters from top B-schools, Flipkart has invited wrath of IIM Ahmedabad as the e-commerce giant is delaying the date of joining of the candidates it has recruited in campus placement 2016 at IIM Ahmedabad by 6 months. Candidates who were hired at a package of Rs.20 lakhs per annum are now asked to join the company sometime in December 2016 while they should start working and getting salary from June 2016 onwards.

The shaky move of postponing the date of joining by 6 months without any explicit guarantee that the job will remain secured, has raised doubt about the placement offers not only at IIM Ahmedabad but also among other top rated B-schools and IITs whose students have also been offered placement by Flipkart in 2016.

Rs.1.5 lakh compensation for a loss of Rs.10 lakhs
Delay of 6 months in joining would cost each candidate a loss of 6 month salary and in many cases it may go beyond Rs.10 lakhs for one candidate. Flipkart has offered a compensation of Rs.1.5 lakhs for the delayed period but the same is not acceptable either to IIM Ahmedabad or to the recently recruited candidates who feel that Flipkart has cheated them as the compensation of Rs.1.5 lakhs cannot make up the loss of Rs. 10 lakhs. Besides, the company is not able to furnish any legal job guarantee to the candidates.

Flipkart is resorting to cost cutting measures as other top B-schools are also suffering from this problem generated by Flipkart. The problem is not being faced by IIM Ahmedabad only, IIT Delhi students and students of other B-schools have also been asked to join after 6 months.

Flipkart may lose trust of IIMs
With the deferred placement move, Flipkart may lose the trust as a big hiring company at IIMs. Not only IIM Ahmedabad but also other top rated B-schools and IITs may come on their guard before allowing Flipkart to participate and recruit in campus placement in future.

Writing a strong letter to Binny Bansal CEO Flipkart, Chief People Officer Nitin Seth and Executive Chairman Sachin Bansal via e-mail, IIM Ahmedabad has asked Flipkart to guarantee the job on the joining date.   The letter has turned down the offer of compensation stating that the compensation should be in the form of a monthly payment starting June and not as a joining bonus or arrears for delaying the joining date.

Letter from IIM Ahmedabad says "Future engagement of Flipkart with B-school campuses is bound to get affected as a relationship based on mistrust and lack of transparency can never be mutually beneficial”.  IIM Ahmedabad further adds "The decision to defer the date of joining, coming as it does so close to the earlier promised date of June 2016, is sure to make this talent pool regret their decision of joining your company. Talented students fresh out of campus, on the eve of starting successful careers, feel cheated,"

Matter not handled well by Flipkart, says IIMA
The letter from IIM Ahmedabad criticizes the poor handling of campus recruitment offers made by the company. The specific mention in the letter said "The matter of campus hiring could have been handled much better with campuses forewarned well in advance and engaged as partners in  this decision making"

Top IIMs asked to join the call
The letter sent to Flipkart has been circulated among top B-schools asking them to join the call. IIM Ahmedabad has forwarded the letter to placement cells of FMS Delhi, IIM-Bangalore, IIM Calcutta, IIM-Indore, TAPMI Manipal, Tata Institute of Social Sciences shunning the move of Flipkart.

Asha Kaul, Placement Chair at IIM-Ahmedabad has asked the Flipkart management to schedule a conference of all the relevant stakeholders to arrive at a mutually acceptable solution to the problem.

IIM Ahmedabad graduates in dilemma
Fresh passed out IIM Ahmedabad graduates who were jubilating on getting good job offers from e-commerce giant never thought of such a situation. Highly expensive education at IIM Ahmedabad requires the students to avail fat education loans which cannot be repaid sitting idle.  Besides many students believing the strength and brand of Flipkart had turned away lucrative offers from other companies. But now the graduates from top B-school of the country are not only sitting idle but are on look out for other alternatives to earn their livelihood.

While Flipkart agrees not to go back on its hiring plan, the company has confirmed the deferment in joining date by 6 months. Besides, the e-commerce giant also shows its helplessness to increase the compensation from Rs.1.5 lakhs. Adding fuel to the fire the job guarantee has not yet been offered by Flipkart.  It is also surprising to note that after going for a placement spree in 2016, Flipkart has now decided to go for the process to restructure its business.

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