As Cloudtail India shuts shop, employees to be absorbed by e-commerce giant Amazon

Amazon's largest seller Cloudtail India, which was formerly a joint venture between the e-commerce behemoth and Catamaran Ventures (N. R. Narayana Murthy's family office), is shutting shop on May 1. Amazon India will onboard over 1000 employees at Cloudtail's parent firm, Prione Business Services, the CEO of Prione, Pankaj Jathar, earlier this month informed the employees in a townhall meeting. Sources say that the transition of operations and employees from Cloudtail to Amazon India (which recently announced a 100 percent acquisition of Cloudtail) has been happening for the past several weeks now. Employees, as per sources, have been given an option to move to Amazon or take a voluntary exit.

BT was the first to report on the development of Amazon absorbing employees from Cloudtail India.

"Amazon will give job offers to the employees at Cloudtail and they will be free to decide whether to continue or not,” one of the sources said. Cloudtail India is now a wholly-owned subsidiary of Amazon India after the e-commerce giant acquired 76 per cent of Catamaran Venture’s stake in Cloudtail at an undisclosed value.

Detailed queries sent to Amazon India and Catamaran Ventures by Business Today did not elicit any response. The story will be updated as and when they respond.

Sources say that Amazon’s decision not to continue with operations at Cloudtail India is to conform to the proposed e-commerce regulations in India which prohibit the online marketplaces from owning any direct stake in the seller entities. Amazon’s senior leadership in India has held series of talks with the government officials during which the foreign e-tailers have expressed displeasure at some of the proposed rules, which, as per them, could stifle the industry.

As per a joint statement issued by Amazon India and Catamaran Ventures last year, the joint venture, which was up for renewal on May 19, 2022, would cease to exist. The companies said that Cloudtail India enabled over 300,000 sellers and entrepreneurs to go online and the top seller also enabled 4 million merchants with digital payment capabilities.

However, the various retail trade bodies have been contending that Cloudtail India was driving more than 90 per cent sales on Amazon platform, leaving other sellers in a disadvantageous position.

Amazon, on its part, has maintained that it was abiding by the regulations which stated that no seller on an online marketplace can contribute to more than 25 per cent of the overall sales. As per the regulatory filings of Cloudtail India, net profits of the seller jumped by 171 per cent year-on-year (YoY) to Rs 183 crore in FY21.