Swiggy may lay off employees, rejig some operations to tide over Covid-19 crisis

Swiggy may lay off employees, rejig some operations to tide over Covid-19 crisis
Photo Credit: VCCircle
21 Apr, 2020

Online food delivery platform Swiggy plans to introduce several cost-cutting measures as it looks to survive the impact of Covid-19 on its business, the company told TechCircle on Monday.  

The measures will impact several kitchen staff members, a spokesperson for the company said, without divulging more information. 

While the spokesperson did not respond to TechCircle’s queries on the specifics of the impact, an Entrackr report said that about 800-900 employees would be laid off in May as part of a board-approved cost-cutting plan.

About 40% of the layoffs will likely be carried out through the annual performance review, the report said, adding that over 300 poor performers would be asked to leave.

The Naspers-backed company may also renegotiate contracts with landlords, relocate some kitchens to more optimal locations and discontinue operations at some kitchens that have been severely impacted, the spokesperson added.

The development may affect the Bengaluru-based company’s aggressive growth plans.

In February, it partnered with 100 new restaurant brands across 13 cities for its initiative BrandWorks. Under this, Swiggy collaborates with restaurants to create new delivery brands. The new brands operate out of its restaurant’s existing dine-in facilities, making it an asset-light arrangement for Swiggy.

In the same month, it raised $112.5 million in a growth round from returning investors Prosus, Meituan-Dianping and Wellington Management. Having grown beyond food delivery, Swiggy planned to use the capital to develop its new lines of business, addressing visible gaps in the market. The company will continue to invest in new growth areas, Stores, Go and SuprDaily, it had said.

In December 2018, it had raised $1 billion in a round led by South African technology conglomerate Naspers.

Earlier this month, it renamed its hyperlocal delivery service Swiggy Go as Swiggy Genie, according to a memo it issued to all its users in Bengaluru. Genie was launched earlier than planned as a way to help its users during the Covid-19 lockdown, it said in the note. Swiggy Go, an instant pick up and drop service, was launched in September.

Read: Coronavirus India LIVE Updates

Separately, Telangana on Sunday announced a ban on cooked food delivery services such as Swiggy and Zomato during the lockdown. The news came in the backdrop of another development where 72 families in New Delhi had to be tracked and quarantined as a food delivery person had tested positive for Covid-19.