Flipkart shutting down Israeli R&D center as global cost cuts deepen
Walmart-owned e-commerce giant lays off entire Tel Aviv team amid restructuring ahead of planned IPO.
The Indian e-commerce giant Flipkart is shutting down its Israeli development center and laying off all employees, Calcalist has learned. Walmart acquired a 77% stake in Flipkart in 2018 for approximately $16 billion, one of the largest e-commerce deals in history. The Tel Aviv R&D hub employs about 40 people who specialize in collecting and analyzing real-time competitor data and building advanced dynamic pricing algorithms.
Flipkart entered Israel in 2018 after acquiring Upstream Commerce, a local startup focused on real-time competitive pricing and market-trend analysis. That deal led to the creation of a development and innovation center that has since spearheaded Flipkart’s work in AI and algorithmic systems.
In a message to employees today, Flipkart stressed that the layoffs are unrelated to the professionalism or performance of the Israeli team. The company said the partnership with the Tel Aviv center had been “productive and valued,” and that the systems developed in Israel remain “critical” to Flipkart’s core operations. Up to 40% of employees will remain for an additional four months to transfer knowledge to engineering teams in India, receiving significant compensation on top of one month’s salary at the end of their employment. All other employees will receive three months’ salary in compensation and a full 2025 bonus.
According to sources familiar with the company, the decision is part of a global restructuring effort as Flipkart consolidates operations, cuts costs, and responds to the security situation in Israel. The company is preparing for an IPO planned for 2026, and in recent months has undertaken aggressive cost reductions that include trimming 25%–30% of its global workforce. The Israeli operation has been affected by these cuts over the past two years, and a recently appointed senior executive reportedly views all decisions strictly through a financial lens.
Costs at the Israeli center are considerably higher than in India, with an AI engineer in Israel earning roughly three times more than a comparable engineer in India. Sources also noted that senior leadership has changed: unlike previous years, when top executives, including the CEO, visited Israel two to three times annually, the new leadership has not traveled to Israel during the war. An Iranian missile strike near the Tel Aviv offices heightened concerns within the company’s leadership.
The Flipkart Group is among India’s leading digital-commerce players and includes subsidiaries such as Flipkart, Myntra, Flipkart Wholesale, Flipkart Health+, and Cleartrip. Founded in 2007, the company has helped millions of sellers and small businesses join India’s digital marketplace. With more than 500 million registered users, Flipkart’s platform offers over 150 million products across 80 categories and hosts more than 1.4 million sellers. Flipkart pioneered services such as cash-on-delivery, no-cost EMI, easy returns, and UPI-based payments, making online shopping more accessible and affordable for millions across India.
