Swiggy to lay off 1,100 employees as Covid eats into business

To cope with the severe impact of Covid-19 on its core food delivery business, Swiggy said on Monday it is laying off 1,100 of its non-kitchen employees across grades and functions, across cities and in the head office, over the next few days.

In an email to all Swiggy employees, Sriharsha Majety, Co-founder and CEO, said: “We are choosing to scale down or shut down adjacent businesses that are either going to be highly volatile or will not be highly relevant for the next 18 months. 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. We are already operating at significantly lower levels on our staffing and physical infrastructure than our earlier footprint, and will continue to optimise before we get more clarity on order volumes for food delivery.”

Grocery to stay

The company said it will continue to invest in grocery and other service offerings that continue to do well and, to enable this, has already realigned some team members from other businesses into these initiatives.

The newest lay-off announcement follows closely on the heels of Swiggy laying off over 800 employees from its private label kitchens across multiple cities. Along with the lay-offs announced today, Swiggy will be letting go off over 2,000 employees, constituting 25 per cent of its original team size of 8,000-plus people.

Last week, rival Zomato, whose business is also disrupted by the pandemic, announced that it was letting go off 13 per cent of its workforce.

All impacted employees will receive at least three months’ salaries irrespective of their notice period or tenure, said Swiggy. For every year spent at the company, they will be offered an extra month of ex-gratia in addition to their notice period pay, it added.

While the standard ESOP policy has a one-year cliff and annual vesting, it will now be extending ESOP vesting to the nearest quarter, including the months of notice period. Also, it will waive the one-year cliff for those who have not completed a year with the company.

Career transition support

For the next three months, Swiggy will provide these employees with career transition support. It will set up an outplacement cell, offer connectivity support, allow them to retain their work laptops and mobile phones allowances, and offer learning and upskilling support. Relocation expenses support for those who relocated to join Swiggy in the last year, medical insurance cover for them and nominated family members, accident and term insurance as well as a wellness assistance programme till December 31, 2020 are also being offered.

“We have always believed in treating people with care and respect at Swiggy, and this process will be 10x more important from that perspective. While we waited to see if we can have these conversations F2F, it’s increasingly looking like a long time away before we get back to our offices. We are, however, definitely going to do this 1-1 and make sure we do this in the most respectful way possible,” said Majety in the same email.