.jpg)
In an email communication to employees, Swiggy said that it will lay off 1,100 employees over the next few days. This move is likely to result in job loss of nearly 14 % of its workforce spanning across grades and functions in the cities and head office. The food delivery company is taking this step in a bid to tide over the economic crisis due to prolonged lockdown measure implemented to contain COVID-19.
Addressing the employees, Sriharsha Majety, Swiggy’s co-founder and CEO, in his email said, “Today is one of the saddest days for Swiggy as we have to go through an unfortunate downsizing exercise. We, unfortunately, have to part ways with 1,100 of our employees spanning across grades and functions in the cities and head office over the next few days.”
Majety informed that the firm had started chalking out an accelerated path to profitability for the food delivery business last December. He also said that “ the Covid-19 hit the company with a huge blow of uncertainty, forcing it to look even harder at its cost base and preparedness for the road ahead.”
“While Covid might have long-term tailwinds for the delivery business and digital commerce when things settle eventually,” he said “nobody knows how long the uncertainty will last. We, therefore, need to be prepared to see through this winter, to emerge stronger on the other side.”
The letter further informed that Swiggy will scale down or shut down adjacent businesses that are either going to be highly volatile or will not be highly relevant for the next 18 months.
“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,” said Majety.
Swiggy will have to cut expenses to be able to achieve profitability with a smaller order volume than planned earlier, he said. The company needs to reduce costs in order to “withstand any further risks” from the Covid-19 uncertainty, he added.
Swiggy has also assured that it would provide the required financial, emotional and career-related support to the affected employees. “All impacted employees will receive at least 3 months of salary irrespective of their notice period or tenure. For every year they have spent with us, we will be offering 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,” Majety said.
The company would also provide medical insurance cover for the impacted employees and nominated family members till December 31. In addition, insurance cover for parents would also be given.
“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,” he said. The impacted employees who had relocated to join Swiggy within the last one year would be reimbursed the expenses in case they wish to move back. Earlier, Zomato had also announced that it will be laying off more than 500 employees.
