Over the next few days, online food delivery platform Swiggy will lay off 1,100 employees across grades and functions working in its head office and other cities. Impacted employees will receive at least 3 months of salary, irrespective of their notice period or tenure, and an extra month of pay for each year they have been in the company, CEO Sriharsha Majety wrote in an email to Swiggy employees on May 18, according to the company’s blog. This development comes only days after rival Zomato laid off around 13% of its workforce.

The decision to lay off employees came despite Majety admitting that Swiggy had “sufficient runway” due to capital raised just before COVID-19 hit. However, “it is incredibly important to prepare for worse scenarios in the macro environment and make sure we are protected,” Majety said.

The company will extend its ESOP vesting to the nearest quarter, and waive its current 1-year cliff for impacted employees who have not completed a year. Swiggy will also provide medical insurance cover to laid off employees and nominated family members till the end of this year. Impacted employees are also eligible for accident and term insurance, and a wellness assistance program until December 31.

A talent acquisition team will help impacted employees find other jobs for the next 3 months. Impacted mid-senior employees will be offered outplacement support from RiseSmart. Those laid off will be allowed to retain work laptops, and the company will cover their mobile phone communication expenses for the next 3 months. Swiggy will reimburse expenses in case impacted employees who had relocated to join the company within the last year choose to move back.

Swiggy will either scale down or shut adjacent businesses that are either going to be highly volatile or will not be highly relevant for the next 18 months. “The biggest impact here is on the cloud kitchens business, with many unknowns about volumes through the year. Since the onset of Covid, we have already begun the process of shutting down our kitchen facilities temporarily or permanently, depending on their outlook and profitability profile,” Majety said. Swiggy reportedly laid off hundreds of cloud kitchen staff in April.

Swiggy will invest in “high-confidence efforts” such as grocery delivery and other service offerings, and has already re-aligned some employees from other businesses into these initiatives. The company will also “significantly reduce” every single indirect cost such as hubs, office infrastructure, etc.