India: After Zomato, foodtech unicorn Swiggy to retrench 1,100 people

Photo: Livemint

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.

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.

Swiggy added that it will scale down or shut down adjacent businesses that are either going to be 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.

This article was first published on livemint.com.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.