Amid COVID-19, Swiggy lays off 1,100 employees
The economic fallout of COVID-19 continues to hit salaried employees, in a way no one could have imagined a few months ago. Last week, Uber and Zomato fired a big chunk of their workforce, and now, food-delivery giant Swiggy is following the same route, laying off as many as 1,100 full-time employees. Here's all about it.
In a recent email to Swiggy employees, Sriharsha Majety, the founder and CEO of the company, announced the mass lay-off. He said the pandemic has forced Swiggy to change its business strategy to brace for further risks, uncertainties as well as 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 told employees "the core food delivery business has been severely impacted" and the company needs to prepare for the worst-case scenarios. He stated, we "need to build a much leaner org and reduce costs to be able to withstand any further risks...We will have to reduce our expenses such that we can achieve profitability with a smaller order volume than hitherto planned."
"This is easily the hardest and longest deliberated decision the management team and I have been faced with over recent times," Majety noted in the letter while emphasizing "that this is not at all a reflection of anyone's performance."
Majety said that all the impacted employees will be informed about the next steps by the HR team and their managers over the next few days. "We have always believed in treating people with care, and this process will be 10x more important from that perspective," he added. "Without the key contributions of every Swiggster, we wouldn't have gotten to where we are today."
All the affected employees will be entitled to a care package from Swiggy, which includes at least 3 months of salary irrespective of their notice period, an extra month of ex-gratia for every year spent at Swiggy, extended ESOP vesting, and medical, accident, and term insurance. The employees will also get outplacement support, connectivity (company laptops/mobiles), and LinkedIn learning support for 3 months.
Among other things, Swiggy will also be providing relocation support to employees who had relocated to join Swiggy within the last 1 year by reimbursing their expenses for moving back.
Swiggy will also be shutting down all adjacent businesses that are "either highly volatile or will not be highly relevant for the next 18 months". Beyond that, it will strive to save money by identifying and reducing every single indirect cost, including that of hubs and offices. The details of the shift to remote working have not been revealed yet.
Along with these cost-cutting measures, Swiggy's focus will remain on doubling down on high-confidence areas of its business. "We are now at an inflection point for the penetration of digital commerce and home delivery in India," Majety added. "This offers us opportunities to continue investing our efforts in grocery and other service offerings that we think will continue to do well."