Zomato lays off over 500 employees, up to 50% pay cut for rest

  • COVID-19 has been a black swan event for the world economy, said Zomato founder & CEO Deepinder Goyal
  • The company also proposed a temporary reduction in pay for all the employees

Written By Anulekha Ray
Updated15 May 2020, 04:50 PM IST
Zomato also proposed temporary reduction in pay for all the employees
Zomato also proposed temporary reduction in pay for all the employees(AFP)

Food delivery major Zomato has announced to reduce 13% of its workforce amid coronavirus lockdown. The company also proposed a temporary reduction in pay for all the employees, starting from June.

The novel virus has severely affected the food delivery business in last two months. The hotels and restaurants across the country were forced to shut their doors to mitigate the spread.

In a blog, Zomato founder & CEO Deepinder Goyal wrote, "While we continue to build a more focused Zomato, we do not foresee having enough work for all our employees."

Over the next couple of days, the company will get on Zoom video calls with the impacted employees to walk them through the next steps and help them find jobs as soon as possible.

Zomato will also implement salary cuts up to 50% across its workforce. "Lower cuts are being proposed for people with lower salaries, and higher cuts (up to 50%) for people with higher salaries," the Zomato founder wrote.

All the Zomato employees who no longer have any work at the company, will get 50% salary for the next six months. Those employees are encouraged to find new jobs outside the company during this period, Goyal mentioned.

Employees who are not in direct payroll, will receive two months of severance (vs. 15 days of contractual obligation), the company said. Zomato employees will be allowed to keep their laptops and phones issued by the company.

The popular food delivery chain formed an outplacement team to support the employees who have to leave the company during global pandemic, Goyal said.

Employees will get the benefits of all the employee stock ownership plans (ESOPs) will and health insurance for the next six months, he said.

Those who have already opted for voluntary cut equal to or more than the proposed temporary reduction in pay, will not come under this "additional cut" by the company.

"This temporary reduction in pay will also be eligible for 2x ESOP grants just like the earlier voluntary cuts. I foresee (and hope) this to be around 6 months from now," said the Zomato CEO.

"COVID-19 has been a black swan event for the world economy; and we do not yet know if we have hit the global minima in this journey with the virus," Goyal added.

Moreover, the company also planned to "make partial or full work from home a permanent feature" for employees. For sales teams, it will full time work from home as office presence is only required for large team meetings, gatherings, performance reviews, the company said.

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First Published:15 May 2020, 04:50 PM IST
HomeCompaniesNewsZomato lays off over 500 employees, up to 50% pay cut for rest

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