- Online Food Delivery Giant Zomato has decided to lay off 13 percent of its employees and announced pay cuts for the remaining employees.
Online food delivery giant Zomato said they let go of 520 people or 13 percent of his employees and undertake up to 50 percent pay cuts for the rest of the company as Covid-19 has severely affected his sector.
The workers affected by the layoffs will get half of their wages along with health benefits for the next six months or before they find their next job, whichever is sooner, instead of a simple severance package. Outplacement will benefit the business.
This is the second time in the last year that Zomato has laid off staff. The business had sacked 540 staff from its customer service department in September 2019, or at the time 10 percent of its workforce.
In an email addressed to all Zomato employees, its founder & CEO, Deepinder Goyal, said, “A lot of restaurants have already permanently shut down, and we know this is just the tip of the iceberg. I expect the number of restaurants to shrink by 25-40 percent over the next 6-12 months. What happens, for better or worse, is the guess of everyone,” he said.
Goyal further added that the entire organization will undertake a temporary pay cut starting in June. “For people with lower incomes, smaller cuts are being suggested, and higher cuts (up to 50 percent) for people with higher salaries,” Goyal said in an official statement. This temporary cut in wages would also qualify for 2X employee stocks grants.
Zomato and his competitor Swiggy have forayed into fast-expanding grocery delivery over the past few months, and have also held talks with state governments on alcohol distribution at home.
Zomato is preparing to start a consumer-facing pickup and drop service, mirroring the Genie service of rival Swiggy. Additionally, the food distribution app investigates ways to extend its logistics services to businesses beyond its platforms
Rival Swiggy said last month that it would lay off a portion of its private brand kitchen staff while discontinuing operations at some of its centers on the back of the Covid-19 pandemic. This has impacted at least 1,000 jobs within Swiggy’s private brands
A greater downsizing effort at the organization could result in more job cuts. Multiple internet companies — like Oyo, Curefit, Udaan, BlackBuck, Treebo, Acko, Fab Hotels, Meesho, Shuttl, Capillary, Niki.ai, and Fareportal — have cut their employees in the last few months, like temporary workers.