Swiggy looks to lay off 1,100 employees

THE FOOD DELIVERY COMPANY WILL REDUCE HEAD COUNT ACROSS GRADES AND FUNCTIONS

BENGALURU: Online food delivery firm Swiggy on Monday said it will lay off 1,100 employees across cities, just four days after rival Zomato axed over 500 staff members. The company will reduce head count across grades and functions, including at its Bengaluru head office.

As the lockdown continues, customers and restaurants are leaving food ordering platforms in droves, posing a challenge to the country’s food tech unicorns.

“The core food delivery business has been severely impacted and will stay impacted over the short term...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 co-founder Sriharsha Majety wrote to employees.

The staff cuts come at a time when the coronavirus lockdown has shrunk food order volumes significantly. Only 25% of restaurant partners were operational, during the first two lockdowns, a Zomato employee told Mint last week. Although both Zomato and Swiggy raised more than $100 million each earlier this year, the companies are bracing for tough days ahead.

Swiggy said all impacted employees will receive 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 payment, in addition to notice period pay, which will work out to be 3-8 months of salary, depending on the tenure.

The firm is also allowing impacted employees to vest their employee stock ownership plan (Esop) to the nearest quarter, which includes their notice period. “While our standard Esop policy has a one-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 one-year cliff for those who have not completed one year,” Majety wrote.

The company is also looking to provide medical insurance for affected staff till December 31, as well as career transition and upskilling opportunities. Swiggy added that it will scale down or shut down businesses which are expected to be volatile or not relevant for the next 18 months.