Just days after Zomato announced its decision to lay off employees, food delivery unicorn Swiggy also said that it is laying off 1,100 employees across functions over the next few days.
In a blog written by Sriharsha Majety, Co-Founder and Chief Executive Officer, the company said, it will be laying off 1,100 employees across grades and functions in the cities it operates and the head office over the next few days and also cut down several business costs to tide over the crisis.
“The core food delivery business has been severely impacted and will stay impacted over the short term, but is expected to start growing again after that…While we are very fortunate to have raised capital just before COVID hit and have sufficient runway today, it is incredibly important to prepare for worse scenarios in the macro environment and make sure we are protected,” said Majety in the blog.
However, the company has assured that all impacted employees will receive at least three months of salary, irrespective of their notice period or tenure.
Also, the company will offer an extra month of ex-gratia for every year the employee was associated with the company. Swiggy has also allowed impacted employees to vest their ESOPs to the nearest quarter including the notice period.
“While our standard ESOP policy has a 1-year cliff and annual vesting, we will now be extending ESOP vesting to the nearest quarter (including the months of notice period) and waive off the 1-year cliff for those who have not completed 1 year,” said Majety.
Along with these measures, the company will also be providing medical insurance to all laid-off employees until the last day of the year. It has also made available the career transition and upskilling opportunities via LinkedIn.
The company also announced that it will scale down or close adjacent businesses that will not be relevant for the next 18 months. The restructuring will mainly hit Swiggy’s cloud kitchen business, which also operates company-owned restaurant brands Homely and The Bowl Company, among others.
This development at Swiggy comes just two days after its Gurugram-based rival and food-tech unicorn, Zomato, said it will let go of 13% of its staff, affecting close to 520 employees.
Earlier last month, Swiggy had laid off around 500 contractual cloud kitchen staff and said it may shut many of its cloud kitchens, relocate them and re-negotiate rental contracts for spaces leased out to them.
“The biggest impact here is on the cloud kitchens business, with many unknowns about volumes through the year. Since the onset of Covid, we have already begun the process of shutting down our kitchen facilities temporarily or permanently, depending on their outlook and profitability profile. 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,” Majety added in his blog.
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