Swiggy's CEO pens 'today is one of the saddest days for us' as it lays off 1,100 employees

Due to impact of global pandemic, Swiggy on Monday announced to lay off 1,100 employees over the next few days due to the impact of COVID-19 on business.

Only last week, its rival, Zomato, announced the reduction of its workforce by 13%, while implementing a temporary pay cut of up to 50% for the remaining employees.

Swiggy will also “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. The biggest impact here is on the cloud kitchens business, with many unknowns about volumes through the year.

“Today is one of the saddest days for Swiggy as we have to go through an unfortunate downsizing exercise…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,” said Sriharsha Majety, Co-founder & CEO of Swiggy in email to his staff.

“Swiggy would provide financial, emotional and career-related support to the affected employees. All impacted employees will receive at least 3 months of salary irrespective of their notice period or tenure. For every year they have spent with us, we will be offering an extra month of ex-gratia in addition to their notice period pay, working out to between 3-8 months of salary depending on the tenure,” he said.

The company would also provide medical insurance cover for the impacted employees and nominated family members till December 31. In addition, insurance cover for parents would also be given.

“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-19 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,” he said.

However, he added “…there is no doubt that we are now at an inflection point for the penetration of digital commerce and home delivery in India. This offers us opportunities to continue investing our efforts in grocery and other service offerings that we think will continue to do well.”