After Zomato, it is now Swiggy who is firing its employees over business stress. The food delivery company on Monday said it would lay off 1,100 employees over the next few days, as the coronavirus pandemic hit its core and cloud kitchen businesses. "Today is one of the saddest days for Swiggy as we have to go through an unfortunate downsizing exercise," Swiggy co-founder and CEO Sriharsha Majety wrote in an email to the company's employees on May 18, according to the company's blog.
He added that the company has been shutting down its kitchen facilities temporarily or permanently since the onset of the COVID-19 outbreak. "We unfortunately have to part ways with 1,100 of our employees spanning across grades and functions in the cities and head office over the next few days," he said.
The CEO said the company's HR team will contact the impacted employees over the next few days. Swiggy is "fully committed to providing the best financial, emotional and career-related support" to the impacted staff, he added.
Swiggy will give at least three months of salary to all impacted employees. In addition to this, it will also give one month of salary for each year of employment with the company. This will be over and above the notice-period pay.
The mail comes close on heels with rival Zomato, which had last week announced lay off of around 13 per cent of its workforce. However, the announcements are no shock to the current market.
The prolonged lockdown and disruptions in delivery had been widely reported in the media. Delivery boys faced challenges while delivering food during the lockdown due to restrictions by the local authorities and police. Then, there were concerns among people that many may even be potential carriers of COVID-19 as the same had happened in Delhi and Bengaluru.
As per market estimates, the food services industry in India employed 7.3 million in 2018-19. Of this, the unorganized sector employed 3.6 million. Some of them worked in small restaurants and, with the closure of eateries, they had no income during lockdown. Due to the extended lockdown, business for this industry has fallen about 70-80 percent, causing a severe impact on the food delivery sector.