Days after Zomato announced that it is laying off employees, rival Swiggy too, has informed employees that it will be laying off 1,100 of them across grades and functions in the cities and head office over the next few days.
Apart from laying off employees, the company also unveiled plans to build a leaner organisation and reduce costs to achieve profitability even with a smaller order volume that planned before.
In a mail to employees, Sriharsha Majety, Co-founder & CEO, Swiggy said that COVID-19 has hit Swiggy’s business with a huge blow of uncertainty, forcing the company to look harder at its cost base and preparedness for the road ahead.
“While we are very fortunate to have raised capital just before COVID hit and have sufficient runway today, it is incredibly important to prepare for worse scenarios in the macro environment and make sure we are protected,” he added.
Sriharsha informed employees that over the next few days, the HR team and line manager will have one-to-one conversations with those being laid off ‘and make sure we do this in the most respectful way possible’.
All impacted employees will receive at least three months of salary irrespective of their notice period or tenure. And for every year an employee has spent with Swiggy, the company will be offering an extra month of ex-gratia in addition to their notice period pay, working out to between 3-8 months of salary depending on the tenure. What this means is that if someone’s notice period is three months and they’ve spent five years with Swiggy, they will get eight months of salary.
Sriharsha has said that while the standard Employee Stock Option (ESOP) policy has a 1-year cliff and annual vesting, Swiggy will now be extending ESOP vesting to the nearest quarter (including the months of notice period) and waive off the 1-year cliff for those who have not completed one year.
Healthcare & Wellness Benefits
All impacted employees will have medical Insurance cover for them and nominated family members till December 31, 2020. Additionally, Swiggy will also be providing insurance cover for their parents. They will have accident and term insurance till 31st December 2020, along with a wellness assistance programme to ensure the physical, emotional/mental and financial well-being of impacted employees and their families, providing unlimited tele/video consultation access to experienced doctors, counsellors and financial advisors till December 31.
Swiggy will also be setting up a dedicated and fully-trained talent acquisition team assisting impacted employees round the clock in identifying suitable opportunities and providing necessary career support for the next three months.
“We will also offer free outplacement support from RiseSmart for mid-senior management employees, giving full access to their career coaching services, content and personalized job search,” Sriharsha added.
Impacted employees will be enabled to retain their allocated work laptops and be supported on mobile phone communication allowance for the next 3 months.
Impacted employees will also get free LinkedIn Learning access for the next three months, for both technical and professional skill development. “We have also curated and assigned content to them around resume building, interviewing skills, emotional intelligence, etc. that will help them with their career transition during this time,” Sriharsha added.
For those employees who relocated to join Swiggy in the last one year and have now been let go, Swiggy will reimburse the expenses in case they wish to move back.
Sriharsha also hinted that Swiggy will be cutting down on real estate costs by identifying and significantly reducing every single indirect cost like hubs, office infrastructure, etc.
A dedicated set of HR team members will assist the impacted employees with their queries pertaining to the Care Package, reimbursement and settlements, insurance, and any other relevant areas.
“To all impacted teammates, I cannot even imagine how stressful this can be and want to let you know we are by your side and are going to do everything we can to help with the situation. We have all built the company together brick by brick and have been very lucky to have you join us on this journey. I am very sorry for having to make this decision, but want to wish you only the very best with everything and want to thank you deeply for all your contributions to Swiggy,” Sriharsha concluded.
Scaling down businesses
Swiggy will be scaling down or shutting down adjacent businesses that ‘are either going to be highly volatile or will not be highly relevant for the next 18 months’. This will include its cloud kitchens business, which has been impacted the most.
Swiggy has already begun the process of shutting down kitchen facilities temporarily or permanently, depending on their outlook and profitability profile. “We are already operating at significantly lower levels on our staffing and physical infra than our earlier footprint and will continue to optimize before we get more clarity on order volumes for food delivery,” Sriharsha said.