On Monday, Swiggy announced laying off 1,100 employees over the next few days as their business is hammered by the coronavirus.
Earlier this week Zomato had also announced the laying of its workforce by 13 per-cent and a 50 per-cent temporary cut off from the remaining employees.
Co-founder & CEO of Swiggy, Sriharsha Majety emailed its employees saying that its a gloomy day for them as they have to downsize the employees. He further wrote that employees affected by the downsizing will be provided full financial, career, and emotional related support. He added that the impacted employees, along with their families will also be provided medical insurance cover until 31 December.
He added that employees who have shifted from their original place to work with the company, their expenses will be covered by the company in case they wish to return.
“…we started chalking out an accelerated path to profitability for the food delivery business last December. We also started making great progress on our unit economics over the following months before COVID-19 hit us… As we came closer to chalking out the final details of that exercise, COVID hit us with another huge blow of uncertainty, forcing us to look even harder at our cost base and preparedness for the road ahead,” Mr Majety said.
“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-19 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,” he said.
He further said, “We will have to reduce our expenses such that we can achieve profitability with a smaller order volume than hitherto planned. This will be done keeping in mind already identified efficiencies, along with additional reductions in teams and initiatives that will have lower activity because of COVID-19.”
He added that it is for sure that they are at an inflation point for digital commerce and home delivery in India due to the coronavirus. However, they are putting their efforts in grocery services and other essential services which will sustain these days, he said.