Food delivery company Swiggy on Monday announced that it will lay off 1,100 employees, or nearly 14% of its total workforce, as the weeks-long nationwide lockdown to contain the coronavirus outbreak severely affected the demand for online food ordering.
This came two days after rival food delivery startup Zomato laid off 13% of its workforce and said it would implement salary cuts of up to 50% across the organisation for at least six months.
“We unfortunately have to part ways with 1,100 of our employees spanning across grades and functions in the cities and head office over the next few days,” Sriharsha Majety, co-founder and chief executive officer of Swiggy, said in an email. “This is easily the hardest and longest deliberated decision the management team and I have been faced with over recent times. We have been fortunate to have some of the brightest missionary talent in the country join us over the last few years, and I would like to state unequivocally that this is not at all a reflection of anyone’s performance.”
The company, which is backed by South African internet giant Naspers, also informed employees that it will scale down adjacent businesses and has already shut several of its cloud kitchens – facilities that only cater to takeaway orders – temporarily or permanently. “Covid hit us with another huge blow of uncertainty, forcing us to look even harder at our cost base and preparedness for the road ahead,” Majety said. “We are already operating at significantly lower levels on our staffing and physical infra than our earlier footprint, and will continue to optimize before we get more clarity on order volumes for food delivery.”
He added that the company’s human resources team will contact the affected employees over the next few days. “We are fully committed to providing the best financial, emotional and career-related support that we can to make this journey less painful, and to ease the burden on you and your families,” Majety said.
The Bengaluru-based company said it will pay at least three months of salary to all impacted workers. Additionally, it will also give one month of salary for each year of employment with the company. This will be over and above the notice-period payment.
The startup also extended its ESOP or employee stock ownership policy to the nearest quarter, which will include the months of notice period and removed the existing one-year requirement for employees less than one-year-old to make them eligible for the scheme.
The existing medical insurance cover for the impacted workers and their nominated family members was extended till December 31. “While Covid might have long-term tailwinds for the delivery business and digital commerce when things settle eventually, nobody knows how long the uncertainty will last,” the chief executive officer said in his email.
India has been under a lockdown for more than 50 days now. The country started the fourth phase of the lockdown on Monday and recorded over 5,000 new coronavirus cases, taking its tally of positive coronavirus cases to 96,169.