Just two months after online food delivery platform Swiggy laid off 1,100 employees owing to the COVID-19 pandemic, the company has now laid off another 350 people, as part of what it called is a “final realignment exercise”. It said that the industry has only recovered to about 50% of its peak, however, this new round of lay offs will also be its final, with no further plans of restructuring, the company said in a statement on July 27. Entrackr first reported the development.
Affected employees will receive a minimum of three to eight months of salary based on the time they’ve spent in the country, including an extra month’s pay for every year completed at the company. They’ll also receive “accelerated” ESPOs, and Swiggy will cover their and their family’s accident and term insurance, and health insurance till the end of this year. Impacted employees will also be allowed to retain their office laptops, and will be provided with job placement and counselling services, the company claimed.
Since the first round of lay offs in the company in May, the COVID-19 infections have increased near exponentially, with India now nearing 500,000 active cases. After laying off 1,100 employees in May, the company has expanded into delivering alcohol in several cities around the country. Its biggest competitor, Zomato had also laid off 13% of its workforce in May, and cut pay for the rest of its employees, as the pandemic continued to hit businesses hard.
However, earlier in July, Zomato claimed that unit economics of the food delivery businesses were increasing, as the company made more money per order. In a mid-COVID-19 report, Zomato said that it was reducing subsidies and discounts to users gradually, which has led to a sharp increase in the company’s margins. “In Q1 FY20, we used to make a contribution margin of –₹47 per order; in Q1 FY21, we made contribution margin of +₹27 per order,” the company said.