Swiggy plans to lay off kitchen staff from its private label kitchens

Online food delivery start-up Swiggy plans to layoff several hundred employees from its private label kitchens across multiple cities to cope with the disruption in business caused by the coronavirus pandemic.

This development comes closely on the heels of Swiggy’s fund-raise of an additional $43 million earlier this month as part of its ongoing Series I round, taking the size of the round to a total of $156 million.

“As Covid-19 disrupts daily life across the country, the hospitality industry has come under severe pressure. As the lockdown gets further extended, we are evaluating various means to stay nimble and are focused on growth and profitability across our kitchens. These include renegotiating contracts with landlords, relocation of certain kitchens to more optimal locations and discontinuing operations at a few kitchens that have been severely impacted since the lockdown came into effect. This will unfortunately have an impact on a certain number of kitchen staff who will be fully supported during this transition” Swiggy said in a statement.

However, the start-up did not reveal the total number of its private label brand kitchen employees that were going to be laid off. The private labels include The Bowl Company, Goodness Kitchen, Breakfast Express and Homely.

The start-up has built up a network of over a 1,000 cloud kitchens as part of its Swiggy Access initiative that helps its restaurant partners with kitchen infrastructure, data analytics and supply chain capabilities. And has invested over ₹200 crore in the initiative so far. It remains to be seen how many of these restaurant partners will continue to be a part of Swiggy Access when the lockdown lifts. Swiggy’s private label kitchens constitute a small percentage of its Swiggy Access cloud kitchens.

Swiggy, which currently has a team size of over 8,000 people, paid full salaries to all its employees much before it was due on April 1. According to sources, this time around, the start-up paid 100 per cent variable pay to all eligible employees without going through the normal appraisal rounds, as most of employees and managers remained busy firefighting with the business disruption caused by the lockdown.

Founded in 2014, Swiggy is India’s leading on-demand delivery platform with a vision to elevate the quality of life for the urban consumer by offering unparalleled convenience. It connects consumers to over 1,60,000 restaurant partners across 520 plus cities. Using innovative technology, Swiggy provides a hassle-free, fast and reliable delivery experience. Every order delivered by Swiggy’s fleet of 2.4 lakh plus active delivery partners engaged on a principal to principal basis, the largest in India, ensures a host of customer-centric features like lightning fast delivery, no minimum order value, live order tracking, and 24/7 customer support.

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