Zomato lays off 13 per cent of work force, notice to come via Zoom call

Furloughed employees to get 50 per cent salary for six months

zomato Representational image

Restaurant aggregator and food delivery platform Zomato on Friday announced that the company would be laying off 13 per cent of its workforce in a bid to preserve cash as the restaurant industry as a whole takes a beating.

“Multiple aspects of our business have changed dramatically over the last couple of months and many of these changes are expected to be permanent. While we continue to build a more focused Zomato, we do not foresee having enough work for all our employees. We owe all our colleagues a challenging work environment, but we won’t be able to offer that to ~13% of our workforce going forward,” Zomato Founder and CEO Deepinder Goyal said in memo sent to all employees.

Those who are impacted will get an invite to a Zoom call within 24 hours—a mode of laying off employees that has grown common across the world, with Uber having done the same for over 3,500 employees recently.

The company announced a slew of measures to help laid-off employees cope, including paying them 50 per cent salary for six months and helping them find jobs.

“All our employees who no longer have any work at Zomato, will continue to be with us at 50% salary for the next 6 months. During this time, outside of the handover period of 1-2 weeks, we expect these folks to spend 100% of their time and energy towards looking for jobs outside of Zomato,” the memo said.

“Some impacted employees work with us through manpower agencies and not directly on our payroll. We are going to help these agencies support these employees with two months of severance (vs. 15 days of contractual obligation).”

Goyal added that he, the recruitment team and other key people would also "work as an outplacement team to help impacted people look for jobs".

In addition, those leaving the company will be allowed to keep their Zomato-issued laptops and phones (if any).

In addition, temporary pay cuts are being proposed for all employees, with lower cuts for those with lower salaries and cuts as high as 50 per cent for those with higher salaries. These cuts will not be given to those who have already take na voluntary pay cut equal to the proposed reduction.

Zomato had an estimated 5,000 employees after a round of layoffs in 2019. The announcement was accompanied by assurance that the company’s financials remained solid.

“Our burn rate is significantly down from pre-COVID levels. We have enough capital to continue growing our business – are financially stable and have a very generous amount of runway in the bank (which is continuing to improve as we bring our burn rate down).”

The company said that a large number of restaurants had shut down permanently, with the total number expected to shrink by 25-40 per cent over the next 6-12 months.

Zomato said that grocery delivery was now available in 185 cities across India, with plans for UAE and Lebanon launches. In addition, the food-delivery business has been launched in Turkey, and 235,000 restaurants have been signed up for ‘Contactess Dining’—a post-lockdown dining experience that will involve contactless menus, ordering and payment.

Goyal took to Twitter to share the news, adding, “We remain committed to our mission of better food for more people, and are determined to continue building Zomato with renewed love and passion for our world and our community.”