Online food delivery platform Zomato on Friday said that it would be reducing its workforce by about 13% (560 employees), on the back of the Covid-19 pandemic. The online delivery platform has also proposed a reduction of pay across the board from June.
In a blog, Zomato founder Deepinder Goyal said that multiple aspects of the business have changed dramatically over the last couple of months.
"Our business has been severely affected by the COVID lockdowns. A large number of restaurants have already shut down permanently, and we know that this is just the tip of the iceberg. I expect the number of restaurants to shrink by 25-40% over the next 6-12 months. What actually happens, for better or worse, is anybody’s guess."
He added that many of these changes are expected to be permanent. "While we continue to build a more focused Zomato, we do not foresee having enough work for all our employees. We owe all our colleagues a challenging work environment, but we won’t be able to offer that to 13% of our workforce going forward." he wrote.
Over the next couple of days, the company said it will get on video calls with the impacted employees to walk them through the next steps and help them find jobs as soon as possible.
On the salary reduction, Goyal said, "Lower cuts are being proposed for people with lower salaries, and higher cuts (up to 50%) for people with higher salaries."
It also said that employees who are no longer on the rolls will get 50% salary for the next six months, and employees not on direct payroll will receive two months of severance.
It has also formed an outplacement team to support the employees who have to leave the company, Goyal pointed out.
It also stated that previously allocated ESOPs will continue to vest during this period of 6 months, as the employees will remain on our payroll with reduced pay.
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