Nearly a fortnight after its rival Zomato announced the layoff?of at least 100 employees as part of its 3% workforce reduction announcement, food and grocery delivery firm Swiggy too is laying off 3%每5% of its workforce.??
Swiggy is laying off up to 250 employees this month, five people aware of the development told ET.
And there＊s more to it. Two of the sources said the layoffs could go beyond 250 in the coming months, while another said people across supply chain, operations, customer service, and technology roles will be affected.
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"We concluded our performance cycle in October and have announced ratings and promotions at all levels. As with every cycle, we?expect exits based on performance," Swiggy said, as per the report.
Swiggy joins the list of many highly valued firms that have been downsizing their teams through layoffs, after two years of excessive hiring, amid a funding squeeze and investor concerns over profitability. Swiggy had become a unicorn after reaching a valuation of $10 billion earlier this year in January.
According to a company insider, Swiggy＊s head of human resources, Girish Menon, informed employees about the performance-based exits in a recently concluded town hall. The company has started restructuring its teams, the person said, as per an ET report.
The layoffs also come on the heels of a report by brokerage firm Jefferies that said?Zomato is leading Swiggy in both food delivery business and its quick commerce business through Blinkit.
Earlier this month, Swiggy shut down its cloud kitchen brand Bowl Company in Delhi-NCR region, but as per the report, the company is ramping up its private label cloud kitchen brand in Coimbatore and Chennai.
Swiggy is moving employees from its grocery delivery service Instamart to other functions, the people cited above said. This is intended to reduce the company＊s cash burn on Instamart as it goes conservative on the expansion of its quick-commerce business.
Also, according to brokerage firm Jefferies, Swiggy＊s losses during the January-June period were "much higher at over $315 million,"? compared to approximately $50 million in losses for rival Zomato on a standalone basis and nearly $170 million inclusive of losses at the latter＊s quick commerce unit Blinkit, the report mentioned.
※Major rationalisation exercise is being planned,§ a person privy to the matter said on the condition of anonymity, as per the ET report. ※They want a very lean team structure across functions. Sensitisation workshops for employees are planned for later this month. They have appointed a consulting firm to advise them on the restructuring＃ Most of the layoffs are likely to happen in tech, engineering, product roles and operations.§
Some industry executives indicated that there could be more layoffs in the coming months as Swiggy is planning to rely on a leaner team to function its various businesses going forward.??
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Last month, Swiggy＊s rival Zomato confirmed that it was laying off nearly 3% of its staff across the organization.?However, Zomato brushed off any issues surrounding the company's financial health and stated that the layoffs would be based on 'regular performance'.?
"There has been a regular performance-based churn of under 3% of our workforce, there's nothing more to it," said a?Zomato?spokesperson, as per various media reports.
At present, the company has nearly 3,800 employees. At least 100 employees have already been impacted across functions like the product, technology, catalog, and marketing, Moneycontrol reported, citing sources.
Earlier in May 2020,?Zomato?had laid off about 520 of its employees, which makes up about 13% of its staff, in response to the slump in business following the COVID pandemic.
Also read:?After Rival?Zomato,?Swiggy?Eyes $800 Million IPO Early Next Year
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