- Food delivery startup Swiggy lays off nearly 14 percent of its workforce — 1,100 employees to cut costs.
Following Zomato, food delivery startup Swiggy lays off nearly 14 percent of its workforce — 1,100 employees to cut costs amid national coronavirus lockdowns. Sriharsha Majety, co-founder and CEO, Swiggy wrote in a letter to employees, “The core food distribution company has been seriously affected and will remain impacted in the short term.”
As of October of last year, Swiggy had about 8,000 workers on its payroll.
All impacted employees will be paid a total of 3 months of pay irrespective of their notice period or tenure. For every year an employee has spent with Swiggy, in addition to their notice period pay, the company will be paying an extra month of ex-gratia. If someone’s notice period is three months and they’ve spent five years in the company, they will get 8 months of salary.
“While our regular ESOP policy has a 1-year cliff and annual vesting, we will now extend ESOP vesting to the nearest quarter (including the month notice period) and waive off the 1-year cliff for those who have not completed 1 year,” Majety said.
The company said it has already temporarily or permanently shut down some of its cloud kitchens-facilities that only cater for takeaway orders.
“The biggest impact here is on the Cloud kitchen market, with several uncertain volumes throughout the year. We have already started the process of temporarily or permanently shutting down our kitchen facilities, depending on their outlook and profitability profile, since the start of COVID-19;
Majety said he had to create a much leaner company and cut costs so he could handle any more threats from the uncertainty. “We’ll have to reduce our expenditures so we can reach profitability with a lower amount of orders than previously expected,” he said.
The famous food supply chain has said it would also benefit those impacted by a smooth career transition. “We will have a dedicated and professionally trained talent management team to assist impacted workers around the clock in finding suitable opportunities and providing the requisite career resources for the next 3 months,” the Swiggy CEO said.
Going forward, Swiggy can define indirect costs such as hubs, office facilities, etc. and substantially reduce them.
In response to the COVID-19 pandemic, Swiggy, one of India’s best-known startups, is among many who are laying off employees and reshaping their company. Zomato revealed on Friday that it would lay off more than 500 employees, or 13 percent of its total workforce. India is currently under a two-month lockdown to prevent the spread of coronavirus that has infected more than 95,000 people across the world.
