Swiggy Lays Off 1,100 Employees, Shuts Down Cloud Kitchens to Mitigate Coronavirus Impact

Swiggy has decided to lay-off over 1,100 employees to mitigate the impact of COVID-19. India has entered its fourth phase of lockdown, and the food delivery industry has been severely hit. Rival Zomato also removed 13 percent of its work force and has cut 50 percent salary for the rest of the employees. Swiggy co-founder and CEO Sriharsha Majety sent out an email to all employees informing them of this decision, wherein he also detailed a new ‘care package' for all the employees that have been impacted. This includes eight months of salary for all employees who have working for more than five years with the company, medical insurance cover for the impacted employee and nominated family members till December 31, and a new tailored wellness assistance programme to help them. The company is also shutting down many of its cloud kitchens business, as it expects to be highly volatile or will not be relevant for the next 18 months.

The layoffs at Swiggy were announced via email to all employees by Majety, wherein he added that the HR team along with the line manager will have a 1-1 conversation with impacted employees. As part of the care package, the company is offering three months of salary irrespective of their notice period or tenure to all impacted employees. For employees that have a notice period of three months and have spent more than five years with the company, they will be offered eight months of salary. For every year of employment, Swiggy is offering an extra month of ex-gratia in addition to their notice period pay, working out to between three-eight months of salary depending on the tenure.

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In his email, Majety adds, “Many team members have joined Swiggy believing in the growth potential of the company and even preferred ESOP to cash at the time of joining. While our standard ESOP policy has a one-year cliff and annual vesting, we will now be extending ESOP vesting to the nearest quarter (including the months of notice period) and waive off the 1-year cliff for those who have not completed one year.” Furthermore, all impacted employees will get medical insurance cover for the entire family, including parents, till December 31. Accident and Term insurance cover will also be extended till December 31. There is a new wellness assistance programme that has been created to assist impacted employees with unlimited telephone and video consultation access to experienced doctors, counsellors and financial advisors December 31.

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Swiggy has also introduced an outplacement team to help these employees get a new job. This team will help ex-employees identify suitable opportunities and provide necessary career support for the next three months. They have also teamed up with RiseSmart to help mid-senior management employees get career coaching services and personalized job search. Swiggy is also allowing impacted employees to retain their work laptops, and is offering mobile phone communication allowance for the next three months. There's also free access to LinkedIn Learning for three months for technical and professional skill development. For all those impacted employees who have relocated within the last one year to join Swiggy, the company promises to reimburse their expenses, in case they wish to move back.

Majety says that the core food delivery business has been severely impacted, but this impact is expected to be a short term one. However, the company is scaling down or shutting down many of its cloud kitchen verticals. Swiggy has already shut down several of its kitchens temporarily or permanently, and looks to significantly reduce its footprint in this segment.

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