Swiggy has been preparing for its second round of layoffs as business continues to flounder amid the pandemic. The food delivery major is in process let go of around 350 employees across operations, marketing, cloud kitchen and product teams, according to three people familiar with the matter.
“The layoffs will be done this week with standard severance packages to the impacted workforce,” said one of the sources mentioned above, on condition of anonymity.
The move is in line with Swiggy’s strategy to control expenses and stretch the runway. Food-delivery companies have been among the worst-hit businesses because of Covid-19 pandemic and experienced no business for two months (March 25 to May 31).
Swiggy and Zomato have recovered up to 35-40% of their pre-Covid-19 volume. Sources say that Swiggy’s daily orders have come down to under 6 lakh from around 15 lakh orders before the pandemic.
“The way the business has been bouncing back is encouraging but Swiggy will take months from here to reach even three-quarters of their pre-Covid-19 volume as lockdowns are continued in a few cities,” said the second source, requesting anonymity.
“The loss of volume is directly impacting revenue which is why the board has given them a nod to cut costs.”
Responding to our detailed queries a Swiggy spokesperson said, “With the industry still only having recovered to about 50% of its peak, we have unfortunately had to go ahead with this final realignment exercise with the net loss of 350 jobs. We are concluding the exercise we began late May and there are no plans for any further restructuring.”
Swiggy is also expected to fire more employees, added the people cited above. Entrackr could not independently verify this and Swiggy has denied any additional layoffs.
The company spokesperson further said that Swiggy is providing a minimum of 3 to 8 months of salary based on tenure; accelerated vesting of ESOPs; an extension of the accident and term insurance for impacted employees; and health insurance for them and their families till December 2020.
The second round of layoffs at the firm have come after two-and-a-half months. Swiggy had let go of around 1,100 employees and downscaled its cloud kitchen vertical. Entrackr had exclusively reported the development in April. Its rival Zomato fired 520 employees in May.
As people across India have been preferring cooking instead of ordering food online, Swiggy has been experimenting with DIY (do it yourself) food kits. The company also began delivering alcohol in states such as West Bengal, Orissa and Jharkhand. It also expanded its grocery delivery service Swiggy Stores to 125 cities.
Apart from this, both Swiggy and Zomato are trying to maintain transparency about safety measures to build customer confidence. Many of the restaurant partners display the temperature of their staff, while the latest body temperature of delivery executives is also available for the user to see.
So far, Swiggy has raised $158 million across three tranches in 2020. At the beginning of this year, South African multinational Internet Group Naspers led $113.3 million in its Series I round this year while Tencent infused $43 million in April. Entrackr had exclusively reported the Naspers’ round in February.