Bengaluru-based food tech company Swiggy is laying off its 1,100 employees. Co-founder and CEO Sriharsha Majety informed the employees through an internal email that was posted later in the Swiggy Blog. Swiggy is taking this decision due to the economic impact of the COVID-19 pandemic.
“As I’d mentioned during the session, today is one of the saddest days for Swiggy as we have to go through an unfortunate downsizing exercise. With a heavy heart, I have tried to share the reasons and details of the process below, because you deserve to know. In line with the above business decisions, we, unfortunately, have to part ways with 1,100 of our employees spanning across grades and functions in the cities and head office over the next few days. This is easily the hardest and longest deliberated decision the management team and I have been faced with over recent times.”, wrote Sriharsha Majety.
He also added “We also started making great progress on our unit economics over the following months before COVID hit us. We had mentioned that we will be focusing on being efficient everywhere – including employee costs – and that we’d come back when we have greater clarity”.
Sriharsha said that the HR team will contact the impacted employees over the next few days. Swiggy is “fully committed to providing the best financial, emotional, and career-related support” to the impacted staff, he added. Swiggy will be providing impacted employees three months of financial support regardless of their notice period. In addition to this, it will also give one month of salary for each year of employment with the company. That means if someone has 3 years in Swiggy then he/she will get 6 months of salary.
Swiggy also extended the existing medical insurance cover for the families of the impacted workforce until December 31, 2020. Swiggy will also provide Wellness Assistance Programme to ensure the physical, emotional/mental, and financial well-being of impacted employees and their families, providing unlimited telephone/video consultation access to experienced doctors, counselors, and financial advisors till 31st December 2020.
The company will either scale down or shut down adjacent businesses that are expected to be highly volatile or will not be relevant for the next 18 months, the CEO said. He said the biggest impact of the COVID-19 pandemic is on Swiggy’s cloud kitchens business.
“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 scaling down our kitchen facilities temporarily or permanently, depending on their outlook and profitability profile.”, he said.