Food tech unicorn Swiggy today said it would lay off around 1,100 of its employees across various grades and functions in the cities and head office over the next few days.
The news comes just two days after Gurugram-based food tech Zomato laid off 13% of its staff.
In an internal mail to the employees, Sriharsha Majety, co-founder & CEO of Swiggy wrote,
“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.”
The communication also said that Swiggy will help the impacted employees financially by providing at least three months of salary, irrespective of their notice period or tenure.
Also, for every year an employee was with the organisation, Swiggy will 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.
“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,” Majety added to the mail.
The medical insurance for the impacted employees will be valid until 21 December 2020. Also, the company will help in career transition and upskilling opportunities.
The restructuring will hit Swiggy’s cloud kitchen business the most. It operates company-owned restaurant brands Homely and The Bowl Company through the cloud kitchen concept.
In April, Swiggy had let go 500 contractual cloud kitchen staff and said it might shut many of its cloud kitchens, relocate them and re-negotiate rental contracts for spaces leased out to them.
“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. We are already operating at significantly lower levels on our staffing and physical infra than our earlier footprint, and will continue to optimise before we get more clarity on order volumes for food delivery,” Majety added in his email.