Food delivery company Swiggy said today that it will lay off 1,100 employees over the next few days, as the coronavirus pandemic hit its core and cloud kitchen businesses.
Sriharsha Majety, Co-Founder & Chief Executive Officer, the company said, “Today is one of the saddest days for Swiggy as we have to go through an unfortunate downsizing exercise,” Swiggy co-founder and CEO Sriharsha Majety wrote in an email to the company’s employees on May 18, according to the company’s blog. He also said the company had already begun shutting down its kitchen facilities temporarily or permanently since the onset of the COVID-19 outbreak.
However, the company has assured that all impacted employees will receive at least three months of salary, irrespective of their notice period or tenure
“While COVID-19 might have long-term tailwinds for the delivery business and digital commerce when things settle eventually, 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 said.
Majety said Swiggy will scale down or shut down adjacent businesses that are either going to be highly volatile or will not be highly relevant for the next 18 months.
“The biggest impact here is on the cloud kitchens business, with many unknowns about volumes through the year. Since the onset of Covid, we have already begun the process of shutting down our kitchen facilities temporarily or permanently, depending on their outlook and profitability profile,” he said.
Swiggy will have to cut expenses to be able to achieve profitability with a smaller order volume than planned earlier, he said. The company needs to reduce costs in order to “withstand any further risks” from the Covid-19 uncertainty, he added.
Meanwhile, the company extended its ESOP or employee stock ownership policy to the nearest quarter, which will include the months of notice period. It also removed the existing one-year requirement for staff less than one-year-old to make them eligible for the scheme.
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