Food aggregator platform Swiggy has announced that it will be laying off 380 employees as part of a restructuring exercise. “This has been an extremely difficult decision taken after exploring all available options, and I’m extremely sorry to all of you for having to go through with this,” said Swiggy CEO Sriharsha Majety, in an email sent to employees.
Sriharsha said that the company had thought deeply about this, and that this decision was 'unfortunate but essential'. “Our focus today is on Swiggsters who are impacted and in ensuring we support them in their transition with respect and care. I’m sure you all have a lot of questions about the way forward and we will be setting up time very soon to discuss these,” he added.
Swiggy said it will let the impacted employees know through 1:1 conversations, and that the company had put together a comprehensive Employee Assistance Plan which will "help impacted employees with their financial and physical well being during the transition."
The Employee Assistance Plan includes cash payouts based on tenure and grade. "This will assure all impacted employees with a minimum assured payout of three months, and this includes variable pay /incentives at 100%; medical Insurance cover for employees and nominated family members till May 31, 2023; career transition support for the next three months will be provided via the company’s placement cell in coordination with reputed staffing agencies; continued access to LinkedIn learning, and the company’s wellness portal till March 31, 2023; those who relocated in the last one year will have their relocation expenses reimbursed if they choose to relocate to their previous location or permanent address; employees will be able to retain their allocated work laptops to help them continue their job search," the email said.
Sriharsha said, "Over the last year, under challenging macroeconomic conditions, companies around the world (public and private) are adjusting to the new normal, with refreshed investment horizons and accelerated timelines for profitability. We’re no exception here, and have already advanced our own timelines for profitability on food delivery and Instamart. While our cash reserves allow us to be fundamentally well positioned to weather harsh circumstances, we cannot make this a crutch and must continue identifying efficiencies to secure our long-term."
In addition, the growth rate for food delivery has slowed down versus Swiggy’s projections (along with many peer companies globally), the email said. "This meant that we needed to revisit our overall indirect costs to hit our profitability goals," Sriharsha said. “While we had already initiated actions on other indirect costs like infrastructure, office/facilities, etc, we needed to right-size our overall personnel costs also inline with the projections for the future,” he added. Sriharsha admitted that the company’s overhiring was a case of poor judgement.
"While we continue to be fully committed to exploring new business opportunities, effective very soon, we will be shutting down our Meat marketplace," the CEO said, adding that the company will continue to stay invested in all other new verticals.
“Our business and overall execution has been on a very encouraging trajectory, and we’ve made huge strides in improving the consumer experience (including a very well done NYE) and profitability. We need to build on this progress, adjust to the new normal, and move forward towards becoming the best version of ourselves,” he said.
Several other tech companies have announced mass layoffs recently, including Google (12,000 employees), Amazon (18,000 employees), Alphabet (12,000 employees) and Meta (11,000 employees). The technology sector has announced 52,771 job cuts as of November, 2022, for a total of 80,978 jobs slashed over the course of the year, according to consulting firm Challenger, Gray & Christmas Inc.