Soon after Zomato announced to lay off 13% of its workforce, another food tech major Swiggy has decided to let go of around 1,100 of its employees across various grades and functions in the cities and head office over the next few days.
“This is easily the hardest and longest deliberated decision the management team and I have been faced with over recent times,” said Sriharsha Majety, CEO of Swiggy in a blog post.
According to the post, the firm has planned to scale down or shut adjacent businesses that are “either going to be highly volatile or will not be highly relevant for the next 18 months.” The post further added that the biggest impact is on the cloud kitchens business “with many unknowns about volumes through the year.”
Since the onset of Covid-19, Swiggy had begun the process of shutting down its kitchen facilities temporarily or permanently, depending on their outlook and profitability profile. Last month, Entrackr had exclusively reported about the upcoming layoff at the cloud kitchen vertical of Swiggy.
On the lines of Zomato, Swiggy is also providing financial support to the impacted employees. For instance, the impacted employees will receive at least 3 months of salary irrespective of their notice period or tenure. The company also plans to offer an extra month of ex-gratia in addition to their notice period pay, working out to between 3-8 months of salary depending on the tenure.
Swiggy’s standard Esop policy has a one year cliff and annual vesting, however, it will now extend Esop vesting to the nearest quarter (including the months of the notice period) and waive off the one year cliff for those who have not completed one year.
During the current health crisis, it will ensure the health and medical facilities to those employees, which include medical and term insurance.
Given that connectivity is going to be paramount during this time from a career transition standpoint, impacted employees will be enabled to retain their allocated work laptops and be supported on mobile phone communication allowance for the next 3 months.
As the Indian economy and businesses have been under doldrums due to the ongoing Covid-19 pandemic, layoffs and pay cuts have become new normal for all the companies and startups. As a part of their cost-cutting plan, startups are being forced to take harsh steps as their businesses have been hit with a deathblow.
Swiggy’s rival Zomato which has also laid off around 520 of its employees a few days ago, is also supporting its impacted staff by providing them 50% of their salary for the next 6 months.
With this move, Swiggy has become the third unicorn in the consumer internet space to opt for mass layoffs. While Zomato would be laying off 13% of its workforce, Paytm also laid off 700 of its employees in April.
Recently, Swiggy also suspended its only loyalty product ‘Swiggy Super’ for an indefinite period of time. It also began a pilot of DIY food kits and started trying out dark stores through UrbanKirana. Entrackr had exclusively reported both developments.