BENGALURU: Swiggy, an Indian online food ordering & delivery firm on Friday said it will lay off 380 employees, citing challenging macroeconomic conditions and slowdown in growth of its food delivery business.
“We’re implementing a very difficult decision to reduce the size of our team as a part of a restructuring exercise. In this process, we will be bidding goodbye to 380 talented Swiggsters. This has been an extremely difficult decision taken after exploring all available options, and I’m extremely sorry to all of you for having to go through with this,” the company’s CEO Sriharsha Majety said.
“Over the last year, under challenging macroeconomic conditions, companies around the world (public and private ) are adjusting to the new normal, with refreshed investment horizons and accelerated timelines for profitability. We’re no exception here, and have already advanced our own timelines for profitability on food delivery and Instamart. While our cash reserves allow us to be fundamentally well positioned to weather harsh circumstances, we cannot make this a crutch and must continue identifying efficiencies to secure our long-term,” the CEO said.
The CEO also explained that the growth rate for food delivery has slowed down, which is totally against the company’s projections. So, the company had to revisit our overall indirect costs to hit our profitability goals.
“While we’d already initiated actions on other indirect costs like infrastructure, office/facilities, etc, we needed to right-size our overall personnel costs also in line with the projections for the future,” he said. The executive also blamed the company’s “poor judgment” for “over-hiring” and said that he “should’ve done better here.”
The company is saying that it will offer cash payout to impacted employees between 3-6 months. It will be based on their tenure and grade. People will receive either an assured three-month pay, 15 days of ex-gratia for every completed year of service, and a balance of earned leave too. Swiggy will at least offer 3 months of payment to all the affected ones and this includes variable pay or incentives.
The other benefits include medical insurance cover till May 2023, career transition support for the next three months, and continued access to LinkedIn learning as well as wellness portal till March this year. Swiggy also asserted that those who relocated in the last one year will have their relocation expenses reimbursed if the employees choose to relocate to their previous location or permanent address. One will also be able to retain their allocated work laptops to continue their job search.
Swiggy had reported a widening of its net loss to ₹3,628.9 crore for FY22. The company had posted a net loss of ₹1,616.9 crore in the previous fiscal. The company’s revenue from operations stood at ₹5,704.9 crore for the fiscal ended March 2022 against ₹2,546.9 crore in the year-ago period.
Apart from startups, big tech global tech firms including Facebook-owner Meta, Amazon, Twitter and Salesforce have also announced thousands of layoffs. The redundancies follow a major hiring spree during the height of the coronavirus pandemic when companies scrambled to meet demand as people went online for work, shopping and entertainment.