[splco_heading size=”15″ align=”left” margin=”30″]Backed by China’s Tencent and Prosus N.V., Swiggy has around 8,000 employees. Bengaluru-based foodtech unicorn Swiggy is laying off 1,100 employees across grades and functions in the cities it operates in and its head office over the next few days, as Covid-19 continues to infect the food delivery and Cloud kitchen business.[/splco_heading]
This comes just two days after Gurugram-based foodtech player Zomato said it would let go of 13 per cent of its staff, affecting close to 520 employees.
“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.
[splco_quote]This is easily the hardest and longest deliberated decision the management team and I have been faced with over recent times,” said Swiggy Co-Founder and Chief Executive Officer Sriharsha Majety in a blogpost, adding, “We have been fortunate to have some of the brightest missionary talent in the country join us over the last few years, and I would like to state unequivocally that this is not at all a reflection of anyone’s performance.”[/splco_quote]
Sriharsha added the firm had started chalking out an accelerated path to profitability for the food delivery business last December. “We had also started making great progress on our unit economics over the following months before Covid hit us,” said Sriharsha.
He said 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, 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,” he added.
Early this month, Rahul Jaimini, co-founder and chief technology officer of Swiggy, said he was moving away from his active role to pursue another entrepreneurial venture.
Swiggy recently said its investors continue to repose trust in the company’s leadership. Their ability to work towards a larger goal and the recent round of funding of $156 million will further strengthen and expand services that offer unparalleled convenience to consumers.
Swiggy has raised $1.6 billion in funding over 12 rounds from investors such as China’s Tencent Holdings, Meituan-Dianping, and Prosus N.V. The other investors include ARK Impact, Korea Investment Partners, and Samsung Ventures.
“While we are very fortunate to have raised capital 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,” said Sriharsha.
Swiggy said the core food delivery business has been severely impacted and will stay impacted over the short term.
The firm aims to build a much leaner organisation and reduce costs to be able to withstand any further risks from the uncertainty.
It will also reduce expenses to achieve profitability with a smaller order volume than hitherto planned. This will be done keeping in mind already identified efficiencies, along with additional reductions in teams and initiatives that will have lower activity because of Covid.
The company is choosing to scale down adjacent businesses that are either going to be highly volatile or will not be highly relevant in the next 18 months. The biggest impact here is on the cloud kitchen business, with many unknowns around volumes.
All impacted employees will receive at least three months pay, irrespective of their notice period or tenure. For every year they have spent at Swiggy, the firm will be offering an extra month of ex-gratia, in addition to their notice period pay, working out to between three to eight months salary, depending on the tenure.
