The top 30% of employees at Flipkart, which includes the senior leadership at the company won’t be handed out any increments this year, the company said in an internal note to employees on Wednesday.

“In the upcoming compensation planning cycle, we will be prioritising employees at Grade 9 and below, ensuring that we are able to provide 70% of all Flipkart employees an increase in their compensation,” its chief people officer Krishna Raghavan said in the email. ET has reviewed a copy of the note.

Raghavan said the company wants to be “prudent” in managing its resources amid tough macroeconomic conditions.

“At Flipkart, we have always attempted to balance employee and org priorities, with our action being driven by what is right for our people. Nevertheless, we do need to be extremely prudent in managing our resources, keeping in mind the dynamic external environment and the fluidity with which the current circumstances are continuously changing,” he said.

Business Standard was the first to report about the company’s decision to not offer increments to its top 30% of employees.

The development comes a day after Flipkart’s parent company Walmart said in its earnings call that it is happy to see the etailer expanding on its positive contribution margin. Walmart CFO John David said that the investment into Flipkart’s infrastructure over the last three years is paying off.

A positive contribution margin means the product being sold at a certain price is able to make contributions or generate money after the deduction of fixed costs at the firm.The development also comes following the option given to current and former employees of Flipkart to liquidate their ESOPs in the second quarter of 2023.

In December, both Flipkart and PhonePe announced their separation formally and the latter has raised $450 million in new funding since then from investors like General Atlantic, Tiger Global, Ribbit Capital and TVS Capital Funds.

The separation and the subsequent shift of PhonePe’s registered legal entity from Singapore to India also led to Walmart footing a $1 billion tax bill to the Indian government.

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