Amid COVID-19, Zomato decides to fire 13% of its workforce
What's the story
The economic fallout of the ongoing COVID-19 pandemic has started trickling down to salaried employees. Just yesterday, Uber fired as many as 3,500 of its customer service employees in a 3-minute Zoom call, and now, food-tech giant Zomato is taking a similar route, laying off 13% of its workforce or about 520 employees. Here are more details.
Confirmation
13% employees to be relieved, confirmed Zomato's CEO
In a recent email to employees, Zomato CEO Deepinder Goyal highlighted the situation of the company's business and announced that about 13% of the workforce will be relieved to preserve cash and brace for the worst of the pandemic. He wrote, "We owe our colleagues a challenging work environment, but we won't be able to offer that to ~13% of our workforce going forward."
Reason
Call needed to be taken due to COVID-19
Goyal made it clear in the message that the decision was taken due to the pandemic, which has severely affected Zomato's business in the last two months. "Multiple aspects of our business have changed dramatically," he wrote, adding that "While we continue to build a more focused Zomato, we do not foresee having enough work for all our employees."
Support
All impacted employees will be supported 'financially and emotionally'
In the announcement, Goyal said he will get in touch with the affected employees within the next 24 hours and provide them help in finding new jobs while giving them 50% salary, health insurance, and ESOPs (if any) for the next 6 months. "We are going to assure them that we stand by them, and will financially and emotionally support them," he emphasized.
Other steps
Other steps also being taken to save cash
Along with the mass-layoff, Zomato will also be cutting salaries of all full-time employees to preserve as much cash as possible. "Lower cuts are being proposed for people with lower salaries, and higher cuts (up to 50%) for people with higher salaries," Goyal said while noting that these cuts would be "discontinued as soon as the economy starts getting back on track."
Effect
How COVID-19 has affected Zomato's business?
Goyal said a "large number of restaurants have already shut down permanently" and he expects the number to shrink "25-40% over the next 6-12 months." "We do not yet know if we've hit the global minima in this journey with the virus," he said. "What we have seen so far might just be the local minima, and the worst might be around the corner."
Twitter Post
Here's what Goyal tweeted after the email
We remain committed to our mission of better food for more people, and are determined to continue building Zomato with renewed love and passion for our world and our community.
— Deepinder Goyal (@deepigoyal) May 15, 2020
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