Foodtech company Swiggy has announced that it has laid off 380 employees in a bid to “rationalize business amid challenging macroeconomic conditions”. The company has joined around 20 growth-stage startups that have resorted to layoffs in the ongoing calendar year.
Swiggy had 6,000 full time employees before the layoffs.
“…We’re implementing a very difficult decision to reduce the size of our team as a part of a restructuring exercise. In this process, we will be bidding goodbye to 380 talented Swiggsters. This has been an extremely difficult decision taken after exploring all available options, and I’m extremely sorry to all of you for having to go through with this,” Swiggy co-founder and CEO Sriharsha Majety said in an email to employees.
According to the email, the company also took a harder look at some of its existing new verticals and it will shut down its meat marketplace. However, it will continue to offer meat delivery through Instamart.
“While our cash reserves allow us to be fundamentally well positioned to weather harsh circumstances, we cannot make this a crutch and must continue identifying efficiencies to secure our long-term,” added Majety.
The company has also announced severance pay for the impacted employees which includes cash payout of three to six months of salary and eligibility to participate in the ESOP liquidity program slated for July 2023. In October 2021, Swiggy announced its $35-40 million ESOP liquidity program for 2022 and 2023. The firm also initiated an ESOP liquidity program worth $23 million in June last year.
In the past couple of years, Swiggy announced several employee-focused programs and initiatives such as an industry-first Moonlighting policy and permanent work-from-anywhere policy. It also rolled out a Build Your Own Dollar (BYOD) program wherein Swiggy employees can choose to invest in Swiggy ESOPs.
Revenue wise, Swiggy managed to grow 2.2X to Rs 5,705 crore during FY22 after a 27% dip in topline during the first wave of pandemic (FY21). The company surpassed its arch rival Zomato in terms of revenue during FY22. However, its total expenditure was way ahead of the Deepinder Goyal-led firm.
As per data compiled by Fintrackr, around 20 Indian origin startups have gone through layoffs in 2023. The list counts GoMechanic, Ola, ShareChat, UpScalio, Cashfree, Bounce, LEAD, Uniphore, Dunzo, among others.
Layoffs can be considered business as usual in a fast shifting economic environment, especially for large startups today, as they try and prefer to fail quickly rather than wait on new initiatives. To that extent, we don’t believe employees should be shocked when it happens, as there is a clear premium built into compensation as well funded startups for precisely this situation, when compared to smaller, privately held firms.