New Delhi: Restaurant aggregator and online food delivery platform Zomato Friday announced that it will lay off 13 per cent of its workforce in light of the coronavirus-led economic slowdown.
Zomato founder Deepinder Goyal, in a tweet, said the company will support these employees both “financially and emotionally for the next six months”.
Here’s an internal email that I shared with all our employees earlier today about upcoming changes at Zomato. https://t.co/IoGeZVnlIS
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— Deepinder Goyal (@deepigoyal) May 15, 2020
In an email addressed to Zomato employees, Goyal explained that the firm’s business was “severely” impacted by the coronavirus-led lockdown.
“Our business has been severely affected by the COVID lockdowns. A large number of restaurants have already shut down permanently, and we know that this is just the tip of the iceberg. I expect the number of restaurants to shrink by 25-40% over the next 6-12 months (sic).”
According to a report, orders on Swiggy and Zomato have dropped by 60 per cent amid the pandemic.
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‘Won’t have enough work for all in future’
In the email, Goyal also said that Zomato doesn’t “foresee having enough work for all” employees in the coming future. The firm has, however, said that those retrenched can work with the organisation for the next six months on 50 per cent of their current salaries.
During this period, they expect these employees to give 100 per cent of their attention on looking for jobs outside of Zomato. They will also be allowed to keep their company-issued laptops and phones.
The email also suggested that this unprecedented situation warrants a re-defined business strategy which will focus “heavily on a small number of large market opportunities in the food value chain”.
Goyal’s email also said that Zomato’s “financial runway looks solid”.
“Our burn rate is significantly down from pre-COVID levels. We have enough capital to continue growing our business — are financially stable and have a very generous amount of runway in the bank”.
At the same time, he also suggested that the company should “reserve as much cash as possible”.
From June onward, Goyal proposed a temporary reduction in pay for the entire organisation. Moreover, lower cuts are being proposed for employees who are paid less salaries and higher for those with more remuneration.
Zomato had sacked 540 employees from its customer support team in September 2019, which constituted 10 per cent of its workforce at the time.
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