Swiggy is likely to become the next high profile startup to hit by lay off blues in the aftermath of COVID-19 nationwide lockdown. According to sources privy to the matter, the foodtech major has received board approval for firing nearly 800-900 employees next month.
Most of the layoffs will happen in the cloud kitchen unit, said an anonymous source. The Bengaluru headquartered company is also likely to shut half a dozen of its cloud kitchen and is already in the process of bargaining for lower rents for many of them, the anonymous source added.
Swiggy is most likely to shut down or renegotiate the rent for those cloud kitchen that suffer from low occupancy.
Sources further add that most workers will be laid off on the basis of annual performance. Employees ranking low on productivity will be asked to leave the organization.
If Swiggy does go for mass layoffs then it will be the latest unicorn startup to take this tough decision. Other unicorns like Paytm and Oyo have already taken the ‘pink slip route’ to cope with slowdown and rationalize their balance sheet. Other non-unicorn startups like Acko and Blackbuck have also choose to scale down their businesses.
The massive onslaught on the startup industry in the aftermath of nationwide COVID 19 lockdown has propelled almost all startups across the board to decelerate their growth. The impact on the hospitality and foodtech sectors has been even more adverse, virtually eating into their bottom-line and profitability.
Telangana government’s recent decision to ban Swiggy and Zomato to curtail the growth of coronavirus is the latest of sign of just how things are tough for the foodtech major.
Even Swiggy’s recent fundraising may not be all that helpful in withholding the layoff decision. The Naspers backed company had raised nearly about $150 Mn in two separate tranches since February of this month.