By Amit - January 20, 2023
One hour ago
Food delivery platform Swiggy has laid off 380 employees, or 6.33% of its total workforce of 6,000. This information was given by Swiggy CEO Sriharsh Majety on Friday. Majetti said it was a very difficult decision for the company.
We’re Saying Goodbye to 380 Talented Swigsters
Sriharsha Majety emailed employees saying, “We are taking the extremely difficult decision to reduce the size of our team as part of a restructuring exercise.” In this process, we are saying goodbye to 380 talented Swigsters. This is a very difficult decision taken after exploring all the available options. I apologize to all of you for going through this.
Swiggy creates Comprehensive Employee Assistance Plan
The company said it has put in place a comprehensive employee assistance plan that will support affected employees with their financial and physical well-being during the transition. Majetti said the company is committed to exploring new business opportunities, but is also keeping a close eye on some of its existing new verticals.
We will continue to invest in new verticals
Majetti said in the mail, ‘Very soon we will close our meat market. While the team has done exceptionally well with solid inputs. We haven’t been able to find product market fit despite our iterations. From a customer perspective, we will still offer meat delivery through Instamart. We will also continue to invest in all other new verticals.
Majetti said that in the last year challenging macro economic conditions, companies around the world are adjusting to the new normal. “We are no exception here and have already extended our timelines for food delivery and profitability on Instamart. While our cash reserves help us to remain fundamentally well positioned in tough times. We cannot make this a crutch and will continue to identify efficiencies to secure our long-term.
Plan to lay off 8-10% employees
A day ago there were reports that Swiggy is planning to lay off 8-10% of its total workforce due to funding slowdown and rationalize costs. It has been told in the report that this time the employees of the product, engineering and operation departments are likely to be affected the most in the layoffs.
Swiggy had earlier said it was aiming to become operationally profitable before launching its IPO, which has been delayed to the later half of this year due to the poor performance of tech stocks in recent months.
Work pressure on Swiggy employees
The company had completed its performance review in October 2022. After which all the employees were placed under the Performance Improvement Plan (PIP). According to sources, Swiggy employees are under a lot of work pressure as the management is reshuffling teams to get the numbers and positive unit economics factoring in ahead of the IPO launch.
Swiggy lagging behind Zomato in the market
Also, amid rising global uncertainties and fears of recession, Indian start-ups are eyeing a possible funding winter. Brokerage firm Jefferies said in November that Swiggy was fast losing market share to its rival Zomato.
Swiggy losses double in FY22
In the financial year 2022 (FY22), Swiggy’s loss more than doubled to Rs 3,628.90 crore. According to Swiggy, the company has incurred this loss due to efforts to increase its gross revenue. Swiggy’s gross revenue grew by 124% to Rs 5,705 crore in FY22. At the same time, the company’s gross revenue in FY21 was Rs 2,547 crore.