Mumbai/New Delhi : Over the next few weeks Reliance Industries’ online whole sale format will reduce the 15,000 workforce in the wholesale division by two thirds as part of a larger cost cutting measure.  After commencing a distribution price war last year, the company has laid off over 1,000 employees while aligning its operations with the recently acquired Carry and Metro Cash.

Three officials privy to the development informed the Economic Times that the company has asked more than 1,000 workers on ground including 500 executives at its corporate office to resign over the last few days.  They are planning to have another large round of layoffs with hundreds of workers already put on performance improvement plan (PIP).   The remaining sales employees have been put on variable pay structure following the lowering of the fixed pay salary of Reliance.

The B2B format of the company replaces traditional distributors for kirana stores.  The company also intends to close down more than half its fulfillment centres where products are prepared and sent to local stores, in order to improve its profits.  The recent acquisition of Metro AG, the German retailer costing $344 is also considered an additional reason for JioMart to make the changes.

The officials informed that with the additional permanent workforce of Metro’s 3,500 staff, there will be an overlap of roles at the backend and online sales operations.  Also, after beginning a price war in the grocery B2B space with deep discounting, prompting traditional distributors to threaten to halt supplies from consumer product organisations, JioMart is looking to focus on reducing losses and improving margins.  Reliance Retail already plays a big part of the online B2B retail market in India.  With the new addition of Metro’s 3,500 employees, workers will be forced to either leave the organisation or change their jobs.

The company has plans to shut over half of its 150 off fulfillment centres supplying general merchandise and groceries to neighbourhood stores.