Word war between Flipkart, IIM-A escalates; what's wrong with start-ups

The word war between India's largest e-commerce firm Flipkart and Indian Institute of Management (IIM) Ahmedabad does not seem to come to an end. IIM-A had written a strongly worded mail to start-up major asking it to either scale down the deferment period or ramp up the quantum of compensation. To which, Flipkart has reportedly responded in negative.

In a blog post on its website, the e-commerce firm said its committed and absolutely confident of having all its trainees on board in December 2016.

The company has offered Rs 1.5 lakh for a period of seven months to compensate for the delay in joining dates. However, IIM-A found it "utterly unacceptable".

"Either the period of deferment needs to be scaled down or the quantum of compensation for deferment needs to be ramped up (Rs 1.5 lakh for a period of seven months is, to put it mildly, utterly unacceptable) to reflect x% of package," said IIM-A in an email to Flipkart.

The online retail major said it has been working on restructuring its businesses to strike the right balance among key levers such as innovation, strategic execution, and operational excellence.

"As a part of this ongoing restructuring, the campus program will also go through a comprehensive overhaul to ensure that it is in line with our new business structure and that our campus recruits start working towards larger company goals from Day One," said Flipkart in a public statement.

While launching a fresh start-up or working with an established one has become a fad among freshers and young professionals, the spar between Flipkart and IIM-A may siphon the sheen off the start-up culture.  

It is notable, Flipkart had reported a loss of Rs 2,000 crore in the financial year 2015 and rival Snapdeal also posted a loss of Rs 1,328 crore in the same year.

Analysts and investors believe the losses at both firms are likely to have risen in the financial year 2016.