350 Swiggy employees lose their jobs in round 2 of layoffs2 min read . Updated: 28 Jul 2020, 09:41 PM IST
Swiggy, which had laid off 1,100 employees in May, said this will be the final restructuring exercise
In what could be the beginning of a second wave of layoffs by Indian startups amid the covid-19 crisis, Swiggy has let go of 350 employees. The foodtech unicorn had laid off 1,100 employees in May.
The foodtech industry is now clocking around 50% of its daily orders compared to the pre-covid levels, said Swiggy.
In fact, the crisis has forced many startups across segments to restructure business models, and reduce employee count to cut costs. Health and fitness platform Curefit also laid off and furloughed around 600 employees earlier this month, after letting go of 800 employees in May.
“In May, we began the exercise of realigning resources to create capacity in higher potential areas with the optimism of the business attaining pre-covid-19 levels in the near-term. However, with the industry still having recovered only about 50% of its peak, we have to, unfortunately, go ahead with this final realignment exercise, which will result in a net loss of 350 jobs," Swiggy said in a statement.
A Swiggy spokesperson said this is the “final restructuring" exercise undertaken by the foodtech major. “We are concluding the exercise we began in late May and there are no plans for any further restructuring," he said.
Swiggy said it will offer a minimum of three to eight months of salary to employees, including an extra month of ex-gratia for every year served, in addition to the notice period pay, to its employees.
In the first round of layoffs, Swiggy had decided to accelerate the vesting period of the employee stock ownership plan, to the nearest quarter, besides continuing with the employees’ accident and term insurance plans till December. It plans to follow a similar strategy this time as well.
In June, it had merged operations of its on-demand premium food delivery service Scootsy, which it had acquired in 2018, with the Swiggy platform. For the company, food delivery accounts for over 80% of its business, which diversified into grocery delivery, and launched a task-based service Swiggy Genie, during the covid-induced lockdown.
Swiggy had also undertaken an exercise to shut and relocate many of its non-profitable cloud kitchens. Along with this, it had laid off 500 of its cloud kitchen workforce, which also included contractual employees.
The second round of layoffs can also be attributed to the slow recovery from the impact of the pandemic, as most startups expected offline operations to begin by July. However, uncertainty around the spread of the virus and localized lockdowns across India continue to hurt businesses. In fact, several other startups are also planning to initiate a second round of layoffs as the industry continues to reel under the impact of the coronavirus pandemic.