Zomato lays off over 600 employees, pay cut for the rest
Zomato's announcement follows a similar move by Swiggy, India’s largest food delivery startup, which cut about 1,000 jobs last month.
Food and grocery delivery major Zomato announced its decision to let go of 13% of its employees amid the COVID-19 lockdown to reduce cost and tide the economic crisis the virus has brought.
Deepinder Goyal, the co-founder and CEO of the Gurgaon-based company, wrote a blogpost announcing this decision and also proposed a temporary reduction in pay for all the employees, starting from June.
"While we continue to build a more focused Zomato, we do not foresee having enough work for all our 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," he wrote in the blogpost.
The coronavirus pandemic has severely impacted the economy and especially the food delivery business in the last few months. All hotels and restaurants have been closed since the end of March. Though food delivery was allowed later on by the government, the volume of delivery has fallen considerably.
Goyal wrote that over the next couple of days, the company will get on video calls with the impacted employees to walk them through the next steps and help them find jobs as soon as possible.
However, all the Zomato employees who are to be laid off, will get 50% salary for the next six months. They will also be allowed to keep the laptops or phones issued by the company.
Zomato's announcement follows a similar move by Swiggy, India’s largest food delivery startup, which cut about 1,000 jobs last month. Both the startups are currently processing fewer than a million orders on their platforms, down from nearly 3 million they were handling before the outbreak.
Both the food delivery heavyweights have also expanded their their businesses. Zomato which started to deliver grocery items during the first phase of the lockdown, said it is now serving this category in 185 cities in India and plans to launch this offering in UAE and Lebanon.
"COVID-19 has been a black swan event for the world economy; and we do not yet know if we have hit the global minima in this journey with the virus," Goyal wrote.
Moreover, the company also revealed its plans to "make partial or full work from home a permanent feature" for employees. For sales teams, it will full time work from home as office presence is only required for large team meetings, gatherings, performance reviews, the company said.