Two Days After Zomato, Now Swiggy to Lay Off Over 1,000 Employees

New Delhi: The axe of COVID-19 on jobs continues, especially in the informal sector and gig economy. Two days after online food delivery major Zomato announced that it was laying 13% of its staff, Swiggy announced on Monday that it was laying off 1,100 employees across cities.

In an email to employees on Monday, Sriharsha Majety, co-founder and chief executive of Swiggy, 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...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."

Swiggy’s Majety said the company was forced to take such a step as the pandemic had its cloud kitchen business, adding that it had already started closing down its kitchen facilities since the outbreak of coronavirus.

Just two days ago, in an email to its employees, Zomato’s founder and CEO Deepinder Goyal, while announcing the axing of jobs also said that remaining staff should be prepared for a 50% ‘temporary” pay cut. Zomato has about 4,000 people countrywide, according to a report in The Hindu.

Citing COVID -19, Goyal said: “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.”  He said he expected the number of restaurants to shrink by 25-40% over the next 6-12 months.

The internal email by Swiggy assured the axed employees that for every year an employee was with the organisation, the company would offer an extra month of ex-gratia in addition to notice period pay, which will work out to be 3-8 months of salary depending on the tenure, LiveMint reported.

According to MoneyControl, just prior to the pandemic’s outbreak leading to the announcement of a sudden lockdown on March 24, Swiggy had raised $156 million.

Among those who have invested in Swiggy are Naspers, Tencent, Ark Impact, Accel Partners among others. The online food delivery major has tied up with around 1,6 lakh restaurants and eateries and operates in over 500 locations across the country.

The lay-offs come at a time when Lockdown 4.0 is underway with the government lifting curbs on food delivery, among other things.