Food delivery company Swiggy said on Monday that it will lay off 1,100 employees over the next few days, as its core as well as cloud kitchen businesses were hit by the coronavirus pandemic. “Today is one of the saddest days for Swiggy as we have to go through an unfortunate downsizing exercise,” Swiggy co-founder and CEO Sriharsha Majety wrote in an email to the company’s employees on May 18, according to the company’s blog. He also said the company had already begun shutting down its kitchen facilities temporarily or permanently since the onset of the outbreak.
“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,” he said. The move by Swiggy came days after restaurant aggregator Zomato said it will lay off around 13 per cent of its workforce.
The CEO said the company’s 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’s core food delivery business has been severely impacted by the outbreak, and is expected to stay impacted over the short term. 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.
“While Covid (COVID-19) might have long-term tailwinds for the delivery business and digital commerce when things settle eventually, nobody knows how long the uncertainty will last,” Swiggy CEO said in the communication to staff.
Swiggy will have to cut expenses to be able to achieve profitability with a smaller order volume than planned earlier, Mr Majety said. The company needs to reduce costs in order to “withstand any further risks” from the COVID-19 uncertainty, he said.
The layoffs at Swiggy come as the country entered the fourth phase of a nationwide lockdown to curb the spread of the coronavirus (COVID-19) pandemic, which has pushed the economy into a standstill and forced many businesses to trim operations.