Nearly 150 mid-level and regional employees at Ecom Express have resigned ahead of the acquisition by logistics giant Delhivery. CEO Ajay Chitkara and several senior executives are also expected to step down once the Competition Commission of India (CCI) clears the deal, according to Mint.
According to Mint sources, CCI’s approval may come through within the next 45 days. Sources also told Mint that several employees have quit voluntarily and that many roles will become redundant after the merger, leading to higher cost savings for the company.
Both companies have declined to comment while the deal awaits regulatory clearance. Chitkara also did not respond to queries from Mint.
What’s the deal?
In April, Delhivery announced it had signed a definitive agreement to acquire a controlling stake in Ecom Express Limited for about Rs 1,400 crore in cash. The acquisition is awaiting approval from CCI, after which Ecom Express will become a subsidiary of Delhivery. The application for approval was submitted on April 19.
This came less than a year after Ecom Express was valued at nearly Rs 7,000 crore. The decline in valuation followed major business losses, particularly after e-commerce platform Meesho launched its own logistics arm, Valmo, significantly cutting Ecom’s delivery volumes.
Struggles started for Ecom before April
Before the acquisition announcement in April, Ecom Express had already been struggling. In February, the company laid off around 500 employees and postponed its IPO plans due to financial constraints. At the time, Ecom had around 15,600 employees and operated in over 27,000 pin codes.
According to Outlook, Delhivery CEO and Managing Director Sahil Barua recently stated during the fourth-quarter earnings call, “The regular attrition in Delhivery’s network itself will provide us sufficient room to absorb all of the qualified staff from Ecom Express across our operations around the country. Needless to say, at the time of their onboarding into the Delhivery network, they will also undergo rigorous training via the Delhivery Academy.”