Covid-19: Swiggy to lay off 1,100 employees
Food ordering and delivery platform Swiggy on Monday said it is laying off 1,100 employees across grades and functions in cities and the head office over the next few days due to the impact of coronavirus pandemic on its business, including cloud kitchens.
In an email to all employees, Swiggy co-founder & CEO Sriharsha Majety said, 'Today is one of the saddest days for Swiggy as we have to go through an unfortunate downsizing exercise.'
Covid-19 has hit the company with a huge blow of uncertainty, forcing it to look even harder at its cost base and preparedness for the road ahead, he added.
Giving the reasons for the laying off of 1,100 employees, Majety shared the management outlook and key business decisions that were reasons for this decision.
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, Majety said.
'We need to hence prepare to come out stronger on the other side by continuing to build on capabilities that will help us make the most of the opportunity when things are better again,' he added.
'We also need to build a much leaner organisation and reduce costs to be able to withstand any further risks from the uncertainty,' Majety said.
The company is 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, he added.
'While this crisis has impacted our core business negatively, 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,' Majety said.
The company will identify and significantly reduce every single indirect cost like hubs, office infrastructure, etc, it is one of the areas where the cut is most prudent given it doesn't affect customer or employee experience, he added.
In line with these business decisions, '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. This is easily the hardest and longest deliberated decision the management team and I have been faced with over recent times,' Majety said.
Swiggy is fully committed to providing the best financial, emotional and career-related support that it can to make this journey less painful, and to ease the burden on the impacted employees and their families, he added.
The company will give all impacted employees at least three months of salary irrespective of their notice period or tenure, Majety said.
'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 added.
Regarding equity, Majety said, 'while our standard ESOP policy has a one-year cliff and annual vesting, we will now be extending ESOP vesting to the nearest quarter (including the months of notice period) and waive the 1-year cliff for those who have not completed 1 year'.
The company will also provide medical Insurance cover for impacted employees and nominated family members until December 31, 2020. Additionally, it will also be providing insurance cover for their parents. They will also be provided accident and term insurance till December 31, 2020, he added.
Swiggy will also provide the impacted employees' career transition support, connectivity support, learning support and relocation support, Majety said.