Food and grocery delivery platform Swiggy on Monday said that it will lay off about 1,100 employees over the next few days, as the COVID-19 pandemic and the nationwide lockdown has impacted both its core and cloud kitchen businesses.
"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. The company also said that it has been shutting down its cloud kitchen facilities since the pandemic.
Apart from travel, hospitality and tourism, the food and beverages sector has been hit very hard in the pandemic. On Friday, another food delivery Zomato had said that it was laying off more than 500 employees.
Sriharsha Majety, co-founder and CEO, Swiggy, said, "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 added that though the core food delivery business has been severely impacted and will stay impacted over the short term, it is expected to start growing again after that.
Cloud kitchens would face the brunt of this action as he states, "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. The biggest impact here is on the cloud kitchens business, with many unknowns about volumes through the year."
The company said that all impacted employees would receive at least three months of salary, with an extra month's salary for every year that they have been with the company. It also said that the medical cover for the employees would continue through this year and that they would be extending ESOP vesting to the nearest quarter (including the months of the notice period) and waive off the one-year cliff for those who have not completed one year in the organisation.
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