The developments come at a time when recently other online food delivery major Zomato said it will let go of 520 people or 13% of its workforce and undertake up to a 50% pay cut for the remainder of the organization as Covid-19 has severely impacted its business.
New Delhi: Online food delivery ordering platform, Swiggy, is laying off 1,100 employees spanning across grades and functions in the cities and head office over the next few days as coronavirus has severely impacted the demand, the said in a statement.
“This is easily the hardest and longest deliberate decision the management team and I have been faced with over recent times. We have been fortunate to have some of the brightest missionary talents 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,” said Sriharsha Majety, co-founder & CEO of Swiggy, in an e-mail to its employees.
According to the e-mail, over the next few days, the HR team along with the line manager will have a 1-1 conversation with impacted employees providing further details regarding the next steps and clarifying any questions you may have.
All impacted employees will receive at least 3 months of salary irrespective of their notice period or tenure, the e-mail said. For every year they have spent with the company, Swiggy said, they will be offered an extra month of ex-gratia in addition to their notice period pay, working out to between 3-8 months of salary depending on the tenure.
The developments come at a time when recently other online food delivery major Zomato said it will let go of 520 people or 13% of its workforce and undertake up to a 50% pay cut for the remainder of the organisation as Covid-19 has severely impacted its business. Instead of a direct severance package, the people affected by the layoffs will get half of their salaries along with health insurance for the next six months or till they find their next job, whichever is earlier. The company said it will help with outplacement.
“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. We need to hence prepare to come out stronger on the other side by continuing to build on capabilities that will help us make the most of the opportunity when things are better again. 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,” Majety said in the e-mail.
Majety said the need of the hour is to build a much leaner organisation and reduce costs to be able to withstand any further risks from the uncertainty. According to him, the company will have to reduce its expenses such that it can achieve profitability with a smaller order volume than hitherto planned.
“This will be done keeping in mind already identified efficiencies, along with additional reductions in teams and initiatives that will have lower activity because of COVID.”