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Swiggy lays off 1,100 employees, offers 3 months’ salary and help in career transition

The firm's lay offs have come just days after its rival and contemporary, Zomato, was forced to take similar steps of dismissing 13 per cent of its workforce.

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New Delhi: Food delivery company Swiggy Monday announced that it will lay off 1,100 employees, roughly 14 per cent of its staff, over the next few days, as the coronavirus-led lockdown continue to hit demand for online food ordering.

In an email to the company’s employees Monday, Sriharsha Majety, co-founder and chief executive of Bengaluru-based Swiggy, said the lay-offs would take place “across grades and functions in the cities and head office” to cut costs and scale down adjacent businesses.

Swiggy is backed by South African internet giant Naspers (NPNJn.J).

Majety’s email also said, “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.”

The company, which had about 8,000 employees on its payroll as of October last year, will provide three months salary to its dismissed staff. “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,” the email further said.

The firm will also offer an extra month of ex-gratia for every year the employee has spent there. This support includes healthcare and wellness benefits with medical insurance for the employee and nominated family members till 31 December 2020.

The start-up will further provide help in career transition with an “acquisition team assisting impacted employees round the clock in identifying suitable opportunities and providing necessary career support for the next three months”.

Also read: Swiggy could shut many of its cloud kitchens, lay off over 500 workers as sales slump

Scaling down kitchens

While Swiggy was already functioning with minimal staff, the firm has now also “begun the process of scaling down kitchen facilities temporarily or permanently, depending on their outlook and profitability profile”, Majety’s email said.

Swiggy had been chalking out an accelerated path to profitability for the food delivery business since last December. “We had also started making great progress on our unit economics over the following months before Covid-19 hit us,” he added.

The firm’s lay offs have come just days after its rival and contemporary, Zomato, was forced to take similar steps of dismissing 13 per cent of its workforce.

India has now entered the fourth phase of a nationwide lockdown. As of 18 April, the country has recorded 96,169 cases and 3,029 deaths.

Also read: Put that on your plate: A guide to surviving the lockdown, and your own culinary skills


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