All impacted employees of Swiggy will receive at least three months of salary, irrespective of their notice period or tenure
It will also scale down or shut businesses that are seen volatile or will not be relevant for the next 18 months
BENGALURU: In an email to employees on Monday, Bengaluru-based foodtech unicorn Swiggy said it will be lay off 1,100 employees across grades and functions in the cities it operates and the head office over the next few days.
This comes just two days after Gurugram-based foodtech player Zomato said it will let go of 13% of its staff, affecting close to 520 employees.
“The core food delivery business has been severely impacted and will stay impacted over the short term, but is expected to start growing again after that...While we are very fortunate to have raised capital just before Covid hit and have sufficient runway today, it is incredibly important to prepare for worse scenarios in the macro environment and make sure we are protected," said Sriharsha Majety, co-founder & chief executive, Swiggy, in the mail to employees.
The internal communication said all impacted employees will receive at least three months of salary, irrespective of their notice period or tenure.
Also, for every year an employee was with the organisation, Swiggy will offer an extra month of ex-gratia in addition to notice period pay, which will work out to be 3-8 months of salary depending on the tenure.
The company is also allowing impacted employees to vest their ESOPs to the nearest quarter, which includes their notice period.
“While our standard ESOP policy has a 1-year cliff and annual vesting, we will now be extending ESOP vesting to the nearest quarter (including the months of notice period) and waive off the 1-year cliff for those who have not completed 1 year," said Majety.
Along with this, Swiggy is looking to provide medical insurance for impacted employees until 31 December, 2020, as well as career transition and upskilling opportunities.
Swiggy added that it will scale down or shut down adjacent businesses that are seen highly volatile or will not be relevant for the next 18 months.
The restructuring will most hit Swiggy’s cloud kitchen business, which also operates company-owned restaurant brands Homely and The Bowl Company, among others.
In April, food delivery unicorn Swiggy laid off around 500 contractual cloud kitchen staff, and said it may shut many of its cloud kitchens, relocate them and re-negotiate rental contracts for spaces leased out to them.
“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. We are already operating at significantly lower levels on our staffing and physical infra than our earlier footprint, and will continue to optimize before we get more clarity on order volumes for food delivery," Majety added in its email.
Going ahead, Swiggy will identify and significantly reduce indirect cost such as that on hubs, office infrastructure, etc.
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