Bengaluru-based unicorn Swiggy is laying off 1,100 employees across grades and functions over the next few days, as Covid-19 continues to infect its food delivery and cloud kitchen business.
Food delivery companies in India, has been hit hard by COVID-19. Both Ziggy and competitor Zomato saw food delivery orders drop 70 percent in late March and early April, according to the Economic Times.
This comes just two days after Gurugram-based Zomato said it would let go of 13 per cent of its staff, affecting close to 520 employees. Backed by China’s Tencent and Prosus NV, Swiggy has around 8,000 employees.
Competitor Zomato is also going through layoffs and cutting about 13 percent of its workforce, or 520 employees, the Economic Times reported over the weekend.
“Our business has been severely affected by the COVID lockdowns,” Zomateo CEO Deepinder Goyal wrote in a note to employees. “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.”
“We, unfortunately, have to part ways with 1,100 of our employees spanning across grades and functions. This is the hardest and longest deliberated decision the management team and I have been faced with over recent times,” Swiggy Co-founder and Chief Executive Officer Sriharsha Majety said, adding, “This is not at all a reflection of anyone’s performance.”
While Covid might have long-term tailwinds, he said nobody knows how long the uncertainty will last.
The news of layoffs comes a little more than a month after Swiggy raised $43 million in a new round of funding, bringing its valuation to $3.6 billion, according to TechCrunch. The company also raised $113 million in February.