Home >News >India >Swiggy lays off 1,100 employees amid COVID-19 lockdown, shuts cloud kitchens

After Zomato, food delivery startup Swiggy announced to lay off nearly 14% of its workforce — 1,100 employees to cut costs amid nationwide coronavirus lockdown. In a letter to employees, Sriharsha Majety, co-founder and CEO, Swiggy wrote, "The core food delivery business has been severely impacted and will stay impacted over the short term."

Swiggy had about 8,000 employees on its payroll as of October last year.

All impacted employees will receive at least 3 months of salary irrespective of their notice period or tenure. For every year an employee has spent with Swiggy, the company will pay an extra month of ex-gratia in addition to their notice period pay. If someone’s notice period is three months and they’ve spent five years in the company, they will get 8 months of salary.

"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." Majety said.

The company said it has already shut several of its cloud kitchens - facilities that only cater to takeaway orders — temporarily or permanently.

"The biggest impact here is on the Cloud kitchens business, with many unknowns about volumes through the year. Since the onset of COVID-19, we have already begun the process of shutting down our kitchen facilities temporarily or permanently, depending on their outlook and profitability profile," Majety told the employees.

Majety said he needs to build a much leaner organisation and reduce costs to be able to withstand any further risks from the uncertainty. "We will have to reduce our expenses such that we can achieve profitability with a smaller order volume than hitherto planned," he added.

The popular food delivery chain said it will also help those impacted with smooth career transition. "We will have a dedicated and fully-trained talent acquisition team assisting impacted employees round the clock in identifying suitable opportunities and providing necessary career support for the next 3 months," said the Swiggy CEO. Going ahead, Swiggy will identify and significantly reduce indirect cost such as that on hubs, office infrastructure, etc.

Swiggy, one of India's best known startups, is among many that are laying off employees and reshaping their business in response to the COVID-19 pandemic. Zomato on Friday announced it was laying off more than 500 employees, or 13% of its total workforce. India is currently under a two-month lockdown to prevent coronavirus spread which has infected over 95,000 people in the country.

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